Wilmington Baseball Stadium: THE FACTS

In response to the local media scrambling to give wall-to-wall above-the-fold coverage to the creation of the PortCityBaseball.com website; a mediocre little short stop (pun?) on the web openly and shamelessly begging for our local governments to pour out taxpayer dollars for the benefit of a few folks in the baseball biz. Local government doesn't spend a dime without such propaganda mills as the Star News cheer leading the effort, and doing what they can to handle the PR and advertising of such ventures for the benefit of the city council.

With that said, consider some truth and research from a website with probably over a thousand times the popularity and return visits than the aforementioned one, but as usual, sure to be ignored by the press - even though we know they read the Wilmington Watcher on a regular basis.

Taxpayer-funded stadiums are nothing new. They have been done over and over again; every new guy to come on the scene with a new plan thinks he is going to build the better mousetrap, and inevitably failing in the end; the taxpayers left holding the bag, as usual.

Here is some data for those interested in holding an educated debate and position on the subject. For those who simply keep muttering the mantra about baseball on the river, and constantly closing their eyes dreaming of the publicly-funded smell of roasted peanuts, carry on.

Thanks to Tom Looney for sharing:

"Taxpayer-subsidized Sports Facilities: Who Pays, Who Wins?"

http://www.lessgov.org/html/stadium-money.html While the beginning of this article provides an argument against sports stadiums, the bulk of this document consists of an extensive bibliography of articles and books that deal with this issue.


• Joanna Cagan and Neil Demause, "Field of Schemes"

http://www.fieldofschemes.com This web site contains information on the current status of sports stadiums that are being built or rebuilt using public subsidies. As the title of this website suggests, the authors are opposed to the use of public subsidies for these projects. Of particular interest is their page entitled: "The Sports Swindle Ticker."


• Daniel Sutter, "Public Subsidies for Sports Stadiums Don't Spur Economic Growth"

http://www.ocpathink.org/economics/PublicSubsidiesforSports.html In this Oklahoma Council of Public Affairs article, Daniel Sutter provides a critical examination of the use of subsidies for the construction of new stadiums. He argues that the construction of new stadiums diverts consumer spending from other forms of entertainment without increasing the total level of consumer spending.


• Ronald D. Utt, "Cities in Denial: The False Promise of Subsidized Tourist and Entertainment Complexes"

http://www.heritage.org/library/backgrounder/bg1223.html In this October 2, 1998 Heritage Foundation Backgrounder, Ronald Utt argues that subsidized public investment in stadiums and similar tourist and entertainment facilities has not been a profitable strategy


• Heartland Institute, "Sports Stadium Madness"

http://www.heartland.org/studies/sports/sports-studies.htm This website contains links to an extensive collection of studies that indicate that public investment in sports stadiums provide few benefits for municipalities.

Plans for a Baseball Stadium Move Forward

With the taxpayer stuck in the gears.

WECT:

Construction work is beginning on the site that could be the home of a baseball stadium in downtown Wilmington.

Crews are tearing down an abandoned building at the corner of Front and Brunswick streets.

The developer, Chuck Schoninger, who owns the property, is paying for the demolition.

Hotels and restaurants are to be built at the location, even if plans for a baseball stadium don't move forward.

Even if they don't move forward? How long has Schoninger had this property? Why is he moving forward with it now? Are we really supposed to believe it has nothing to do with the baseball stadium?

An Open Letter to the Wilmington City Council

Dear Members of the Wilmington City Council:

Your continued pursuit of objectives detrimental to our city's financial health; as well as your unyielding efforts to indebt taxpayers beyond solvency are duly noted. Your message of indifference to those whom you fear no reprisal that live only a doorstep away from the new city limits, and your sheer contempt for their rational concerns is understood as well. Your stubborn quest to engage in a massive spending plan in order to benefit a few who share baseball as a personal hobby is registered. And your collective failures to consider the best interest of the citizens who fund your self-absorbed gravy train is completely recognized.

Now, a response from one of the 15% who vote in the city; and one of the 5% of that, who are not already loyally tied to one or more of your campaigns at election time.

You are not leaders. You are not visionaries. You are not statesmen. You are puppets and hacks who use your office for personal gain. You embarrassingly whore yourselves out to special interest, and to any entrepreneur or investor that catches your eye with a flash of quick cash. You are easily bought and swayed by the allure of money and power. You have absolutely no integrity, and no honorable intentions. Our city hangs its head in shame that we have such simple children empowered to take and spend our money at will. The common thread across everything that you stand for and commit to, is that it must be a great opportunity, simply because it isn't your money.

True leaders would tell anyone interested in building a baseball stadium here in Wilmington that we have a great city we are proud of, and to feel free to come here and spend 100% of your own money to purchase the land, and build and operate the park. But instead, you drool and roll over, anxiously willing to shovel mountains of other people's money to anyone who charms you with simple, empty rhetoric. Like handing a child's kaleidoscope to a tribe of island natives who have never been exposed to any element of modern civilization, your eyes gleam in wide-eyed fascination.

True leaders would tell a developer asking to be annexed in order to fulfill his plans of development that it could be considered, but the best interest of the citizens in the affected area is the foremost priority. But instead, you drool and roll over, only thinking of more revenue to hurry up and waste on the next fruitless endeavor.

True leaders would never willingly and arrogantly suffer the citizens animosity between their local governments who they need working together for their best interest. But instead, you drool and roll over, selling our city piecemeal to an out of state developer charming your simple minds with a small amount of cash, in spite of the damaging implications to local government diplomacy.

Your convention center is a laughable insolvent failure that will forever mark your legacy. Our downtown area does not have the infrastructure to support more of this nonsense. We are in debt to the tune of tens of millions of dollars, and cannot afford more. But you will doggedly and capriciously pursue your selfish wishes with sheer antipathy toward reality and restraint.

You have no clue how an economy works. None of your spending of our money creates economic opportunity. Your arrogance precedes your every intention by believing that you can spend my money better than I can. Your spending first requires the confiscation of money out of citizens' pockets - money otherwise used to stimulate the local economy in an organic manner. Taxpayer money that you spend is absorbed - it doesn't multiply; and worse, it has to be paid back with interest, further creating an economic vacuum. I am amazed at your lack of intelligence and understanding of this matter. If government spending creates prosperity, then why not confiscate 100% of citizens' wealth; build 100 baseball stadiums, 100 extra parks, 100 extra bike paths, and 100 new convention centers? Think of all the wonderful prosperity then!

Mr. Anderson, a few short weeks ago, you didn't support taxpayer dollars going to a baseball stadium. You are obviously a quick study in the ways of the collective mentality of the city council, and have no doubt made your comrades proud. Please change your party affiliation immediately, and make it official that you are a defiant and progressive statist like your counterparts. Your personal legacy is shaping up to be one who is an utterly disingenuous hack.

Ms. Haynes, for someone who constantly believes that she is the most educated and intellectual person in any room she walks into, you seriously lack an understanding of basic economics and representative government. You arrogantly refer to those such as myself, who prefer government to be run like a business when you distort such an idea when it matches your wishes; yet you would never opt for running our government like a true business, which would entail constantly thinking of fiscal efficiencies, cuts in spending, and true innovation. A well-run business would never make the failed investments that this council is known for, that accomplish nothing except magically make mountains of "free" money disappear forever.

Mr. O'Grady, you feign offense at anything that implicates you in any behavior or thinking less than stellar excellency, yet you lead the pack in promoting the message that our city is, in fact, for sale. You have stated that the baseball stadium can only work with taxpayer dollars being sunk into it - I would challenge that in saying why don't you invest your money into it instead, since it is such a winning proposition? I won't wait for that to happen however.

Mr. Rivenbark, Ms. Padgett, and Mr. Saffo, if the baseball stadium, or any other big ticket hobby item is such a wonderful investment, why aren't you the first one in line to pony up your own cash? Every one of the "great opportunities" that you support find you mysteriously missing from putting up your own money to cash in on the great investment you promise they will bring. Why is that? Because I know it's not because you are full of it. You have told us that the convention center was one of those once-in-a-lifetime opportunities and investments that will reap dividends for generations to come - and yet, only in its infancy, it stands as an utter failure of government, rife with debt, seeded with malfeasance, and completely insolvent for decades to come. Simple math indicates that the ROT funds do not come anywhere close to paying the total annual costs associated with it operation, and that general fund dollars are quietly filtered into it - but you evade and conceal this fact from the public, one of the few things that you do well.

Mr. Sheridan, before you is always the opportunity to stand out from the go-along crowd and speak up for the best interest of those you are supposed to serve. Time and time again, you fail that challenge, opting instead to appease those you serve with, rather than think outside of the prevailing mentality.

As a council, your collective legacy is nothing more than an abject dereliction of duty. As usual, I expect no response, and nothing to change. Citizens expressing disdain for your decisions has never had an impact on you, and that surely isn't going to change anytime soon. But know that not all of us are simply hypnotized, and thereby disengaged, by celebrities on TV pretending to dance, or morons trying to sing, or next month's issue of US Weekly. Some of us are paying attention to true matters of importance, and will do all we can to remove you from office for your contemptible failure to truly represent the citizen, and be humble stewards of their money.

We have a wonderful city in spite of you - not because of you. As a proud Wilmingtonian, I will do all I can to restore honor, dignity, and restraint to our local government, before you run it into the ground, and completely bankrupt us all.

Neil Anderson Breaks Campaign Promise

Yes, folks, it took Neil Anderson all of ...a day? Two days? To go back on a campaign promise.

If you'll remember, Neil presented himself as firmly in opposition to a publicly-funded baseball stadium. What is revealed an email? Neal's support for a publicly-funded baseball stadium.

You can't get much better than that.

WECT:

In an email to some members of the commission today, Wilmington City Council Member Neil Anderson noted council members, commissioners and the prospective owners of the interested minor league baseball team are set to meet today. Anderson encouraged members of the commission to "be the better man in this relationship and make a gesture of greater/stronger support in their partnership on this once in a lifetime opportunity for our city, county, and region."

Sounds like pretty strong support to me! Maybe Neil will be able to give us a great park downtown too to complete our economic development. That's what leads to flourishing cities, right? Parks and baseball stadiums?

The entire reason for Neil's email was apparently because some on the County Commission are cooling their support for the baseball stadium due to the satellite annexation the city performed last night. Aren't you glad that our local government is run like a high school?

In any case, this is the first in a long list of disappointments. As in any City Council meeting, there are a number of terrible things on the docket, and Neil voted for all of them.

• C3. The allocation of $25k for unspecified improvements to the Portia Mill Hines Park. Maybe Council got a description of the improvements to be done, but they're not in the supplemental material.
• C8. The awarding of a $200k contract to Alta/Greenways to develop our Greenway Plan. What is a "Greenway Plan?" Well, it's basically a document telling us where to put our bike paths and parks (can't have enough parks, can we?) Why can't city or county staff figure this stuff out? Beats me, but now we have Alta/Greenway making $200k to figure it out for us. Nevermind that $200k would pay the annual salary and benefits for about three members of the planning department.

What is this money being used for?

The breakdown of the expenses is truly hilarious.

Task 1: Project Kick Off Meeting $5,560.00
Task 2: Identify Opportunities and Constraints $46,000.00
Task 3: Public Involvement and Presentations $48,320.00
Task 4: Prepare the Draft Comprehensive Greenway Plan $50,760.00
Task 5: Develop and Present Final Plan $24,805.00
Task 6: Provide Final Report and Brochure $12,060.00
Subtotal Fees $187,505.00
Budget for Reimbursable Expenses $12,495.00
Total Fee and Expenses $200,000.00

Yes, folks, it will cost them $5,560 to have a "Project Kick Off Meeting." These Alta people sure know how to party, but I suppose I would too, if I could do it on other people's money.

Task 2 is a legitimate thing they have to do. In the description of Task 2, they say they'll have to review all of the local Land Use and Transportation plans, but if we had used City or County staff, presumably they'd be much more familiar with all of these documents! That's a big chunk of the $46k for Task 2.

To me, it seems like we just spent $200k to have a consultant tell us something we could easily figure out ourselves (that is, if you even think the project is necessary, which is in and of itself doubtful.)

• C18. We paid $23k to a contractor to "review and assess the development review process." Again, is this something we should be paying a contractor for? 9 out of 10 downtown business owners say doing business with Wilmington is more difficult than doing business with other cities, so we clearly do have a problem with the development process, but another contractor? This is something that City Council should get off their rump and do themselves.
• O4.a. We pushed back the completion date on the Bradley Creek Sidewalk Project from August 21, 2010 to October 21, 2012. That's over two years, folks. It's also going to cost more than $152k than anticipated because of "unanticipated drainage issues," blah, blah, blah.

Folks, there are these kind of things in every single City Council meeting. There are wasteful things that nickel and dime us to death, or sometimes thousands of dollars us to death. There are also major white elephants like the convention center and potential baseball stadium that seriously threaten the fiscal health of the city. Seeing as he was against the baseball stadium, I never would have guessed Neil would roll over for the good 'ole boys, and gals, and Margaret Haynes, so quickly.

Neil, you need principles. Remember what Thoreau said: "The best government is that which governs least." We're at such a precarious point in our economy we can't stand to have it crushed under more wasteful government spending.

Cantankerous Council Commands Crooked Contract, Crosses Commission

In a unanimous vote on Tuesday night, the Wilmington City Council voted to go forward with a satellite annexation of a developer's property located in the Marsh Oaks area of North Market Street, some two miles from the city boundary.

What makes this especially interesting, is that the reason this issue even came up, is because the New Hanover County Commission denied the developer's zoning request to build a 282-unit apartment complex in an area that simply cannot handle anymore traffic load. The developer simply went to the city to ask to be annexed in exchange for favorable zoning to build his project, despite NC case law specifically addressing this type of bilateral agreement between city and developer, and citing it as illegal in two cases specifically, Chrismon v. Guilford County; and especially in Good Neighbors of South Davidson v. Town of Denton. The issue is also discussed at length in a very insightful article by Robert Ducker for the UNC School of Government.

Despite hearing from dozens of concerned citizens from the affected area, as well as other citizens concerned with the unnecessary excesses of government, the city council proceeded without hesitation. Many excellent arguments were made against this as being a completely raw deal for the upper middle class neighborhood of Marsh Oaks, who will now have to welcome Section 8 voucher receivers - and the statistical crime that accompanies them - as their neighbors, despite their personal decisions to purchase their properties in an affluent part of the county.

Council's only concerns were whether or not they had to provide any services to the developer's property. The answer was largely no, so it appeared as a win/win to a council completely indifferent to a community's plight. Furthermore, two of the New Hanover County Commissioners addressed the council, warning them that going through with this as presented would severely hinder the previously good working relationship between the city and county. Since the ignoring of this warning, the fallout has already started to transpire.

Councilwoman Margaret Haynes, in her typical smug disposition, stated that she often hears how government should be run like a business, and in doing so, she would apply a cost-benefit analysis to this issue. According to her, the decision is all benefit and minimal cost. However, she has never shown any propensity to conduct the affairs of government in any other way like a business, such as cutting taxes and implementing cost-saving measures to run more efficiently.

Several citizens alluded to the obvious quid pro quo that seemed evident between the developer and the city. One glaring testament to this was that the developer's own PowerPoint presentation was entitled, "Voluntary Annexation & Zoning Request". This truly speaks to the nature of the issue, that the developer is only asking to be annexed if in fact he can be granted the proper zoning to go forward with his project. The NC Supreme Court has defined this practice as "illegal contract zoning"; and it is, in fact, illegal.

Councilman Kevin O'Grady, also smug in his tenor, feigned outrage at several citizens alleging a "deal" between the developer and the city, stating that he never made any such deal. However, although a true deal may in fact be in the works, even without a solid "deal"  being struck, it is obvious to anyone with any intelligence that there is a definite understanding between the two entities about what needs to take place for both to benefit.

County Commission Chairman Ted Davis stated that this is a slippery slope, since the precedent is set that anyone who has a project denied by the county, can simply approach the city for what they want, and the city will most likely oblige. This current council has made it clear that Wilmington is, in fact, for sale.

What Could Go Wrong with a City Buying a Hotel?

Ahhh, yes, more hotel madness, and this time it's not just limited to Wilmington.

Carolina Beach has been bitten by the hotel madness bug, and it's led to allegations of corruption!

What a surprise!

WECT:

Carolina Beach leaders closed two hotels owned by the town's non-profit CBP3 last week, but one issue regarding the property remains open.

Problem number 1: the town has a non-profit. What is this necessary for?

Problem number 2: they have/had two hotels? Why would they need two? I suppose they like competing with themselves.

Included in the accusation letter that spark [sic] the initial investigation is an signed affidavit from fellow, now former, Councilman Alan Gilbert. The document details Gilbert's version of how the town took over the property.

In closed session, town council originally authorized the Town Manager to bid up to $500,000 on one of several lots that were a part of Arcadius Development and now up for auction.

Gilbert attended the auction, where he said a representative from Republic Bank approached him. The representative said Mayor Macon told him about the town's interest in the oceanfront property, according to Gilbert's affidavit.

Carolina Beach bought one property that day for $475,000, but Republic Bank bought six others for $2.1 million. The bank continued to bid on the property in an effort to raise the price, according to the document.

Gilbert suggested the bank ran up the price of the properties at auction after learning of the town's interest in them from Macon. At a special closed session, Mayor Macon then informed the rest of town council that the bank would sell the property for $3.6 million. Once loans and interest were included, the town owed $4.3 million.

Did you notice how fast that happened? WECT doesn't even go into it. (Great job reporting you guys.) Let's delve into it a bit more.

As far as I can make out, there's the accusation that Macon and Republic colluded to sell this property to the town. Republic seems to have bought the property because they knew that the city would buy it from them at a hefty price. Macon clearly would have to be getting a kickback from the bank here for getting the city to buy this hotel at a later point.

Of course, WECT doesn't go into any of this. It seems like there's a huge story here, but they're just afraid to ruffle feathers (or the feathers of certain people), or whatever the case may be.

And what exactly did Carolina Beach get for $3.6M? This is the picture with the story:





Wow. What a classy joint. I'd gladly pay $60M for that.

Folks, this is an example of why government must be kept limited. You get people in there with no real philosophy about the role of government and they start thinking they have to get involved in whatever is big in the local economy. In this case, it's a roach motel.

We all know government has no roll in the hotel business. Now I wonder if they'll learn that about convention centers?

Wilmington City Council Decides How to Make City Worse

You could have sworn the baseball stadium was dead from the rhetoric on the campaign trail for City Council, right?

Repeatedly, people like Bill Saffo, Laura Padgett, and Ron Sparks all said that they didn't support public money going to the proposed baseball stadium downtown, or some slick-tongued variation of that.

Well, that's not what the new rhetoric is.

StarNews:

Annexation policy, a proposed baseball stadium and the Cape Fear Skyway bridge were some of the topics Wilmington City Council tackled as it prepared for next year.

[...]The Atlanta Braves came earlier this month to talk to city and county leaders about a potential minor league team moving to the city. Elected officials have been in talks for years with different organizations interested in making Wilmington home to a minor league team. O'Grady said the Braves offer is the city's best chance to get a team.

The Braves, according to Saffo and O'Grady, are only interested in putting the stadium on the riverfront on vacant land next to PPD. Saffo said the stadium would seat about 32,000 and could be used for events other than baseball.

Most of the council seemed to agree that a stadium would be a boon for downtown. But Padgett – who repeatable said she wasn't' against the stadium – brought up several obstacles to building it, including money, traffic issues, and if a stadium is the best use of riverfront land.

O'Grady said a partnership between New Hanover County and the city would be essential to secure the necessary funding and debt.

"We have to spread that risk," O'Grady said.

Notice that this wouldn't be an issue if the Braves (minor league) wanted to come here and build the stadium themselves. They could simply buy the land, build it, and everyone presumably would be happy. The only reason that this is an issue for the City Council is because some public dollars are going to go into it.

It's truly disgusting. If you listened to the campaign rhetoric, you have had the impression this was all but dead. Folks, this stadium is going to cost $42M (probably over $70M with debt service), and there's ample research showing the publicly-funded stadiums don't work.

Of course, if the City Council actually cared about research and learning from things other cities did, we'd have no convention center right now.

Then there's more.

Laura Padgett wants more incentives for new businesses that may (emphasis on the may) come here, or for existing businesses that threaten to leave.

Councilwoman Laura Padgett said Wilmington needs someone to focus on economic development and do outreach to attract industry to the city. Padgett said economic development groups in the region tend to wait for things to come to Wilmington. She wants a "performance" spreadsheet to track money spent on economic development and what the return on investment might be.

"We don't look at the business opportunities that are here. We are missing some opportunities and those things take a while to develop. I don't think there is enough effort made to keep business here."

Wowie zowie. What a novel idea, Laura. Actually tracking performance. And it only took you sixteen years of being in office to come up with this.

Let's take a look at actual research on the success or failure (emphasis on the failure) of economic incentives to businesses.

Duke University:

The Lee Act was passed in 1996 in order to promote investment and job creation in the less developed regions of the state [NC]. It separated the counties into tiers, with job creation and investment tax credits increasing dramatically if done in a less developed county. A job created in a prosperous region can bring as little as $500 in tax credit; the same job in one of the poorest counties can in fact bring $16,500.8

The impact, however, turned out to be different than anticipated: two-thirds of the more than $60 million of credit claimed in 2001 were awarded to the top counties, with those at the bottom barely receiving anything.

[...]A survey taken in 2000 by Rondinelli and Burpitt found that international company executives operating in North Carolina placed government tax incentives, agency assistance and financing close to the bottom of the 11-item list of factors that managers felt to be influential in their location decision.

State Journal:

First, MEGA's [Michigan Economic Growth Authority] incentive packages did not improve Michigan's per-capita personal income, employment or unemployment rate.

Second, MEGA did not improve the per-capita income, employment or unemployment rate of any county in Michigan. In each county, the researchers estimated the range of impact somewhere between zero and modestly negative.

[...]The results of the Michigan study are not unique and are for the most part consistent with every other study that has looked at the economic effect of government-subsidized incentives.

And how much are spent on corporate relocation incentives? At least $50B per year nationwide. It's a true disaster.

How much more proof do you need? Let's take a look at one free way to improve our economy: loosen our zoning code and improve our zoning administration.

In 2003, Anaheim, CA took away the restrictions on mixed use downtown (our downtown is mixed use, although the rest of the city isn't.) They "allow[ed] almost any imaginable use of property." Billions in private investment poured in. In 2005, 1/3rd more businesses formed than in the previous year.

Let's not forget that 9 out of 10 downtown business owners say that the city of Wilmington is more difficult to do business with than other cities.

Is it not obvious what we have to do to improve our economy? A truly common sense, free-market oriented approach would actually get results and wouldn't cost a thing. Of course, the current City Council doesn't see that as an option. To them, the only option is for them to plan your life better.

The article then goes on to say how annexation and the Skyway Bridge are still issues for the City Council, and we'll probably be hearing more about this stuff as the year goes on.

It's truly astonishing to me. These people have zero clue. They are going to drive this city into the poor(er) house. The only thing that's still a question is how Neil Anderson feels. To be perfectly honest my expectations aren't high, but he could be the one thorn in the side of this big government juggernaut.