(The Center Square) – Economists say that reports making large economic claims about a new Chicago Bears stadium in Arlington Heights should be ignored as “purchased propaganda.”
Arlington Heights posted a pair of similar reports regarding the stadium and development proposal while asking for $855 million in public funds for infrastructure at the site. The Bears are also asking for a reduction of property taxes on the site through state legislation.
The project is said to include a stadium, 1.9 million square feet of residential space along with 378,000 square feet of retail and 400,000 square feet of office and hotel space.
Teams and municipalities looking to gather public support and public funding for sports stadiums often commission reports making big economic claims about the benefits of a project.
In this case, the Bears reports say that moving the team from Soldier Field to a new stadium in Arlington Heights would lead to increased jobs, tax revenue and benefits from large events such as hosting a Super Bowl.
Arlington Heights officials said that having two similar reports, both of which the Bears paid for, indicate “the validity of the two independent studies.”
Economist J.C. Bradbury and other economists who have studied stadium project benefits disagree.
“If my idiot brothers come to the same conclusion independently, it doesn’t mean they’re correct,” Bradbury told The Center Square. “Fifty years of research by objective experts consistently find that stadiums are non-salutary public investments. The consultants who were paid to come up with estimates, so they came up with estimates. Their forecasts were not produced by methods deemed to be reliable. They are not credible.“
Bradbury said that the claims of large economic benefits for Arlington Heights through diverted spending that would have previously occurred in Chicago is doubtful.
“In general, the amount of imported spending that crosses the boarder within a metro area is trivial, certainly not large enough to cover the taxpayer costs,” Bradbury said. “This has been seen in studies of Truist Park and The Battery in Atlanta, as well as analysis of the Dallas Cowboys relocation, and the former MLS stadium (SeatGeek) in Bridgeport. There is no reason to expect a positive fiscal impact.”
Economist E. Frank Stephenson of Georgia’s Berry College has studied the impact on hotel room stays from sporting events, telling The Center Square that NFL games lead to a few thousand hotel stays per home game and “generates nowhere near enough activity to justify subsides of hundreds of millions of dollars.”
The report sasy that a Super Bowl in Arlington Heights would lead to $580 million in economic impact for the state along with 82,000 unique visitors.
“Super Bowls generate more hotel activity than other NFL games, but as Heller and I showed in our Super Bowl paper (1) the actual inflows are lower than claims in economic impact reports, and (2) much of the revenue gain comes from large increases in room rates which means that much of the revenue likely flows to hotel owners who typically don’t live in the host city (e.g., Hilton shareholders are all around the U.S. and probably in other countries too),” Stephenson told The Center Square.
The commissioned reports say that the project will not only benefit Arlington Heights but also Chicago and the surrounding areas through increased visitors.
“If people do stay in downtown or airport hotels that reduces the return that Arlington Heights would get on whatever subsidy (either explicit or tax exemptions) it provides to lure the Bears to Arlington Heights,” Stephenson explained.
The economists said that while the exact numbers on what a project will lead to is uncertain, it is clear from repeated prior studies that the impact won’t be nearly what the reports show.
“It’s impossible to ‘know’ since they are based on an imagined future,” Bradbury told The Center Square. “But, 50 years of research suggests that stadiums are poor taxpayer investments, largely because most spending is reallocated local spending.
“The methods used by the consultants have not been demonstrated to be sound. No one should trust them. In any event, the amount of commerce that happens is trivial relative to the size of the community economy, and the costs are substantial.”
