Hearne: The Trouble With ‘Studies’ Like The Sprint Center’s

sprint_center_lrWill they ever learn?

Time and again, the mainstream media falls prey to some of the dumbest hoaxes in the business and political universes. I’m talking about those commissioned feasibility studies paid for by vested interests and used to con politicians, editors and reporters into helping schmooze taxpayers into granting tax breaks.

The latest: a “study” showing the Sprint Center added more than $660 million to Missouri’s economy the past five years.

The unbiased, public-minded think tank behind this revelatory news:

Would you believe, the Sprint Center?

Believe.

Raising the question of why would Sprint Center operator AEG commission a study for any other purpose than to deliver the best imaginable results? Leaving out, of course, anything pertaining to how Sprint Center may have had a negative effect elsewhere, like say at Kemper Arena where the city has lost millions as a direct result of the new arena. Actual millions, not ginned up millions.

4337540687_11dfe08692Some study.

“Is it possible that feasibility studies cannot be trusted…” writes Diane Ragsdale, a student at Erasmus University in Rotterdam, researching the impact of economic forces on US nonprofit regional theaters.

“My hunch is that the large majority of feasibility studies conducted are irrationally exuberant and portray campaigns and the expansions that they support as being sustainable when, in fact, the large majority of them are not,” she continues. “Why would they do this? Well, the cynical side of me assumes it is because (a) consultants are not generally hired to deliver the truth; rather, they are hired to legitimize the choices that arts organizations and funders have already determined to undertake and/or (b) feasibility consultants often stand to gain from campaigns that go forward as many of them offer ongoing fundraising or building consulting services.”

Bingo!

IMG_1841“All of these studies are done to justify the numbers,” says one local businessman who’s worked in the field for years. “That’s what they do; they make up their minds as to what they want to do and then they commission the study.”

As for feasibility study firms roles in these ruses, “They wouldn’t get anymore studies commissioned if they didn’t come up with numbers that the people paying for the studies liked,” says the source. “These studies are bogus, they always have been. They never analyze things correctly. They never tell you about the $40 people from Nebraska spend out at the ballpark. Because most of the people at those games are from here and a lot of the people from out of town are in town anyway and if they didn’t spend the money there they’d have spent it someplace else in town.

“And they leave a lot of the facts out. The costs that come with whatever it is they’re proposing. People should be skeptical because it’s just a phony ass way to generate more money – a means for them to come back and ask for more money. It’s a false economy. And for the city it’s terrible because they’re just leaching off other places that are already open. At best they’re diverting people from places that don’t have tax incentives and in some cases putting them out of business – like the Beaumont Club. And the city ends up the net loser.”

So three cheers for the Star’s business section headline yesterday that mirrored the one in the press release sent out by the Sprint Center:

“Study Shows KC Reaping Big Benefits From Arena.”

What’s the solution?

“I’ve been thinking for a few years that perhaps we need feasibility studies undertaken on behalf of ‘the people’ of the community—paid for with local government funds but hired and supervised by an independent committee,” Ragsdale writes. “Think of it as spending a little to save a lot…

“Are capital expansion feasibility studies a racket—a deception between organizations and consultants that stand to benefit from positive assessments? If so can we fix this? Would feasibility studies commissioned by local governments help, or would those be just as corrupt? Why do so many campaigns derail and run out of steam? Why are the expansions so impossible to sustain over time? How do we get a better picture of the total costs of ownership of these buildings? How do we recognize a potential disaster in the making before loans are issued, grants are awarded, and architects are hired?”

How indeed.

Maybe we can start by ignoring the obviously self-serving studies rather than breathing credibility into them with newspaper puff pieces.

 

 

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18 Responses to Hearne: The Trouble With ‘Studies’ Like The Sprint Center’s

  1. smartman says:

    We can dream can’t we? Probably something Tim Leiweke paid for before getting whacked.

    Economics is a zero sum game. $1.00 that I spend here is a $1.00 I won’t spend somewhere else.

    When you just factor in the losses at Kemper and the P&L subsidy the Sprint Center doesn’t even wash away those sins.

    • the dude says:

      My only response is a resigned, “UH, DUH”.
      What do you think a paid insultant is going to do, publish something that takes their dinner, lunch and breakfast away?
      That, is insultant suicide, won’t be doing too much business if they told the truth all the time.

      • admin says:

        I hear you, dude.

        What’s bogus is how lazy the local media is in running with these things as fact and not calling anybody out.

        Or at the very least, reducing the press release to a tiny paragraph and making sure readers know it was a PR piece paid for by the beneficiary of the good tidings.

        • the dude says:

          Yeah, the article should have the paid advertisement disclaimer on it like big chunks of the the rest of it. No doubt.

  2. paulwilsonkc says:

    Great. Just GREAT. Two hours from KCC releasing a report just sent to me;
    “Why Paul D Wilson is one of Kansas City’s Most Influential Personalities”.

  3. harley says:

    this ranks as one of your worst articles hearne.
    Duh…everything in this article is common sense.
    So kc should have never built sprint because it hurt kemper…even though
    kemper was a dingy nasty place that acts were bypassing.
    You probably also thought it was dumb to build kaufman center…because
    it took away from lyric/and other theatres and venues.
    Why build power and light…it took away from Westport or the plaza..
    that was a waste of money…but without it downtown would be dead!!!!
    don’t build anythyig…because it will hurt some other business…no more
    …why build the new soccer park…it took money from arrowhead…
    THE WORST IS THAT PEOPLE FROM NEBRASKA when in town might
    spend money at royals stadium….but why build royals stadium because those
    same people would have spent money at the municipal watching the kangaroos.
    or at the zoo watching the poor polar bear.
    hell hearne ….don’t build anything….don’t. build a shopping center at 135th street
    because those shoppers would have spent their money any way else on the
    plaza or inward parkway….
    Where do we get these business bozos? Who gave you this information??????
    Sprint allowed kc to bring in some huge shows…if we didn’t get sprint would
    garth have spent 7 nights at kemper? If downtown didn’t have power and light
    would we have gotten some of the sproting events….if you read anything besides
    “SILVER SPOON MONTHLY” you might see a different world out there.
    If we listened to guys like you and smarmyman we’d be watching baseball ayst
    Brooklyn….shopping at the landing….you guys don’t get it.
    economics is not a zero sum game….if you put sprint/power and light/downtown/
    kaufman/the legends/the raceway/etc. together we’ve seen billions and billions
    of dollars comeinto the kc economy..and the multiplier effect of those billions
    is enormous like nothing we’ve seen economically.
    you don’t see how the
    real world works and when you step away from jamming the star or
    some article about the Baptist church or a drunkfest at the p and l …
    essentiall you’re OUT OF YOUR COMFORT ZONE!!!!!!
    thanks..
    Harley

    • cheech lifting his pud says:

      ZZzzzzzzzzzzzz.
      Are we going to have to hear from this dolt daily now?
      It was so nice when he was gone.
      Go back to Tony’s and your big time blog contributions.
      This cost me 4 Mississippi’s scroll down.

  4. admin says:

    It may seem like common sense to you, H Man, because you’re quite insightful.

    But when local news swallows something like this lock, stock and barrel and regurgitates it for the unsuspecting masses, that’s bogus.

    You know, I doubt that AEG and the Sprint Center would choke out the many thousands of dollars to have a “study” like this ginned up if they thought that everybody was as smart as you.

    • harley says:

      thanks h jr. …..I appreciate the compliments…but it seems so stupid
      tht people would believe some of these stats.
      Sure all these prjects help the city but everyones leaving kc..
      skills path/board of trade/ whats going to be left?

    • Super Dave says:

      +1

  5. chuck says:

    Right on the money Hearne.

    This reminds me of studies done in anticipation of pro sports stadiums and teams coming to town. The end result enrichens the owners and players, NOT the citizens.

    http://news.heartland.org/newspaper-article/2005/02/01/decade-research-sports-stadiums

    I like the Chiefs and Royals, but thier contribution to the local economy is not the manna from heaven they would have you believe. Their are other studies besides Cato that say the same thing.

    In fairness, I gotta admit, I love the Sprint Center, Union Station, the sports teams etc etc, but an unbiased “study” in advance of tax increases or abatements would seem to make more sense for the locals.

  6. Mysterious J says:

    This is a rare case where I have to agree with Hearne. The study is nonsense, and the fact that The Star would run with it is even worse. I have to say though, Spring Center has NOTHING to do with the Beaumont Club.

    • Hearne says:

      You’re right, I think he was thinking of the midland, another taxpayer funded deal that definitely is taking bites out of everybody from the uptown to knuckleheads.

  7. Hearne says:

    By the way, I still think Kansas City overall benefited by sprint, the midland, etc. But buying into phony numbers is not exactly the best way for Kansas City to drive a hard bargain

  8. b12 says:

    The “study” is crap. We all know that. But…if Harley knew how to condense thoughts, people would be able to see he has valid points.

    Pour money into Kemper, which is akin to sending someone to Vegas to find Mayweather…or pour money into Sprint Center and P&L?

    All the hotels around the airport are full. The $1.50 a night “arena tax” is chugging right along.

    It’s a slamdunk net positive for Kansas City. So the Beaumont Club closed. So did Jardines. That wasn’t because of P&L or Sprint.

    Economics is not a zero sum game. If it was, we’d all be riding horses and living in log cabins.

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