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