Last month, Shreveport Mayor Ollie Tyler proclaimed that the city would pursue building a facility to house a New Orleans Pelicans minor league team. That would cost the city $30 million, with another $100 million spent by the Alabama firm Corporate Realty to build stores and a hotel around it. Pelican management remains undecided about where to locate the squad.
Opposition immediately surfaced as Shreveport has roughly $750 million in infrastructure needs without funding presently for $300 million, meaning the $30 million would displace other priorities. And the $30 million would depend upon roughly $2 million a year in tax collections from the complex for decades; given Shreveport’s troubled history with supporting professional sports franchises – currently none – and the past instability of what the National Basketball Association at present calls the G-League with 46 different team structures that last a little under five years on average, there is no guarantee the team would stay an extended period of time or generate enough money to repay the bonds.
Note also that few host cities built arenas specifically for G-League teams and that the area already has three available, underutilized facilities – Centenary’s Gold Dome, the Hirsch Memorial Coliseum, and the CenturyLink Center. Of course, Shreveport doesn’t own any of these and it appears the deal with Corporate Realty hinges on plunking down a new arena for the development to occur.
This raises two other questions about the viability and need of the entire project. With national trends away from malls, either indoors like Shreveport’s Mall St. Vincent or Bossier City’s Pierre Bossier or outdoor like Bossier City’s Boardwalk, and with these three entities locally facing challenges to keep occupancy rates up enough to stay out of bankruptcy, does adding another outdoor venture in this market really make sense? And if the whole development is such a good idea, why doesn’t Corporate Realty build and own the arena?
The answer comes from Corporate Realty’s own economic analysis; it can’t make it without the taxpayer subsidy. Projecting out two decades, from the presence of the entire complex Shreveport makes only between around $700,000-1,000,000 annually in sales taxes and, after an initial bonus from new construction, only around $85,000 a year in property taxes, and about $175,000-$200,000 in spinoff revenues elsewhere. The rest will have to come from whatever rent and other costs it can impose on the Pelicans or else the city loses money.
In other words, isolated the arena would lose lots of money. That’s consistent with all the academic literature on the topic, perhaps best summed up in an article describing Roger Noll and Andrew Zimbalist’s recently edited book, Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums: “A new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. No recent facility appears to have earned anything approaching a reasonable return on investment. No recent facility has been self-financing in terms of its impact on net tax revenues. Regardless of whether the unit of analysis is a local neighborhood, a city, or an entire metropolitan area, the economic benefits of sports facilities are de minimus.”
None of which Brando, who did a pitch on the Internet for the arena with Corporate Realty’s backing, seemed to know when interviewed by KEEL Radio. He insisted, contrary to practically every real-world example, that it would bring fiscal benefits to Shreveport. He castigated those who pointed out it could take away from other capital outlay. He crowed about how a similar Corporate Realty development in Waco next to Baylor University’s off-campus McLane Stadium had worked out – never mind that facility didn't use public dollars for its construction.
But his arrogant sanctimony peaked when he revealed the “real” reason for opposition to the deal, because a “significant percentage” of it is based on race. Brando, based of his anecdotal observations and summoning the purported consensus about the NBA 40 years ago, concluded that whites didn’t want the complex because too many black guys play professional basketball.
Naturally Brando, who lives in the luxurious Southern Trace subdivision, has no clue as to what it’s like to have to walk over substandard sidewalks and drive on substandard streets, in dangerous neighborhoods that depend upon police infrastructure to patrol – all capital outlay projects far more needed in some parts of Shreveport than creating another place that serves as a playground for wealthy individuals like Brando. Nor does he seem to know that leading the opponents of the matter, which the City Council will review today, are led by black politicians.
Normally, such dimwitted remarks would deserve no more than a chuckle, but Brando’s odious and gratuitous injection of race into the matter merits condemnation. And goes to show that while you’ll do well to let him announce a game, don’t ever let him make public policy decisions.
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