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Star Editorial: City should stand up to Pacers

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  • Re: Star Editorial: City should stand up to Pacers

    Originally posted by Swingman View Post
    That is really your argument. I don't care what the tax is on, it never goes towards ownership of the building. Wouldn't ticket tax be akin to sales tax? When did any kind of sales tax go towards ownership of the building?

    Sure the Pacers leaving would hurt the city. If any big business left, then it would hurt the city. Should the City or CIB bend over for every business just because they threaten to leave if they don't get their way?
    *sigh*

    No, ticket taxes don't go toward ownership of the building. Who in any of this argument said that the Pacers should end up owning the building?

    It means that the money spent BY THE CITY has been recouped BY THE CITY through income from ticket taxes that would not have come in without the building. Ironically, that's part of the argument why the city could afford to let the door hit the Pacers on the way out of town, because the building has broken even at this point. However, it also shows that the city hasn't somehow been screwed by not charging rent. Heck, one could say the ticket tax IS the rent, it is just charged to attendees rather than the lessee directly. Whether or not the city used that money to pay off the actual bonds is no more the concern (or fault) of the Pacers than the supposed bad business decisions of PS&E are the fault (or concern) of the CIB.

    This whole thing is really boiling down to different views of where money comes from and where it goes. Take away the idea that if it is a corporation or a rich person then it is somehow automatically evil, and you find they are really just negotiating between a tenant and landlord the way any individual tenant and landlord would negotiate. Both of them are trying to get the best deal possible. In this case, though, there is a very real (though the level is certainly debatable) intangible benefit to the landlord (the city) to the continued residence of the tenant (the Pacers) over and above pure money paid and received.
    BillS

    A bird in the hand is worth two in the bush.
    Or throw in a first-round pick and flip it for a max-level point guard...

    Comment


    • Re: Star Editorial: City should stand up to Pacers

      Originally posted by BillS View Post
      Ah. So, since this would be unfair, in your business you would take the first building offered at whatever the rental cost, pay the utilities and the maintenance, and make do with whatever the layout and facilities are, without any "shopping around" to find a better deal.

      No, I think I would reconsider the financial viability of whatever business I would put in a totally free facility built to my specifications and that would be upgraded to my specifications at no cost to my company, and not really look to relocate at all, and threaten to have my company "explore all of our options" if I am not paid to operate my business for the health of the city as a major city, as well as the tenants of all of my major retail clients who might suddenly "move out" and leave my mall property as a desolate blight in the downtown area as the downtown was when I made it what it is today.

      I would also quietly put feelers out in the circle of the megarich that I have friends in and let them know that I have a "face of the franchise" in place as a small portion of any potential ownership group in Larry Bird, and that I am considering either selling the franchise or simply disbanding it with the "wink-wink" blessing of the NBA and the city to break the current lease situation impasse and have that same new ownership group come in about a year or two later to revive the Fieldhouse and start over as a low cost expansion franchise, as long as the new ownership group makes it "worth my while" to disband the team by making up some of my losses in other business relationships I have with them.

      Comment


      • Re: Star Editorial: City should stand up to Pacers

        Originally posted by BillS View Post
        *sigh*

        No, ticket taxes don't go toward ownership of the building. Who in any of this argument said that the Pacers should end up owning the building?

        It means that the money spent BY THE CITY has been recouped BY THE CITY through income from ticket taxes that would not have come in without the building. Ironically, that's part of the argument why the city could afford to let the door hit the Pacers on the way out of town, because the building has broken even at this point. However, it also shows that the city hasn't somehow been screwed by not charging rent. Heck, one could say the ticket tax IS the rent, it is just charged to attendees rather than the lessee directly. Whether or not the city used that money to pay off the actual bonds is no more the concern (or fault) of the Pacers than the supposed bad business decisions of PS&E are the fault (or concern) of the CIB.

        This whole thing is really boiling down to different views of where money comes from and where it goes. Take away the idea that if it is a corporation or a rich person then it is somehow automatically evil, and you find they are really just negotiating between a tenant and landlord the way any individual tenant and landlord would negotiate. Both of them are trying to get the best deal possible. In this case, though, there is a very real (though the level is certainly debatable) intangible benefit to the landlord (the city) to the continued residence of the tenant (the Pacers) over and above pure money paid and received.
        Able seemed to imply that the taxes paid equated to the pacers paying back the cost that the city paid for the building initially.

        As I previously stated, the continued residence of any big company is worth more to the City than any monetary amount (mainly due to job creation). But you can't expect said city to survive if they have to give out sweetheart deals to everyone.

        Comment


        • Re: Star Editorial: City should stand up to Pacers

          Originally posted by Swingman View Post
          the continued residence of any big company is worth more to the City than any monetary amount (mainly due to job creation).

          Two questions:

          1. Do you really mean "any" big company? And "any" amount?

          2. Do you think the Pacers, or PS&E, fit under the definition of "a big company"?

          The Pacers cannot be justified on the basis of job creation. The team has value to the community, but I dispute that they earn public support "mainly due to job creation." PS&E employs about the same number of people as a grocery store, and the peripheral jobs (vending, custodial, outside food service) are not the sort that deserve public investment.
          And I won't be here to see the day
          It all dries up and blows away
          I'd hang around just to see
          But they never had much use for me
          In Levelland. (James McMurtry)

          Comment


          • Re: Star Editorial: City should stand up to Pacers

            Originally posted by Putnam View Post
            Two questions:

            1. Do you really mean "any" big company? And "any" amount?

            2. Do you think the Pacers, or PS&E, fit under the definition of "a big company"?

            The Pacers cannot be justified on the basis of job creation. The team has value to the community, but I dispute that they earn public support "mainly due to job creation." PS&E employs about the same number of people as a grocery store, and the peripheral jobs (vending, custodial, outside food service) are not the sort that deserve public investment.
            Well, if you hit Scotty's or The Pub or any of a number of other late-night establishments after a game, they are pretty packed and crowded. I would seriously doubt that would be the case if the games were not taking place. And, if you are denigrating these as jobs not worth creating, the very existence of these kinds of places means other businesses might come to downtown because there are places for their employees to go.

            Therefore, while not direct, there are a lot of jobs or business opportunities that would not be in downtown Indianapolis if the Pacers weren't there.

            I'd grant it doesn't have to be the Pacers specifically, anything that brings people downtown 41 times over 6 months would do the same, but you'd have to put in a lot of effort to replace those nights with individual or even short-term events.
            BillS

            A bird in the hand is worth two in the bush.
            Or throw in a first-round pick and flip it for a max-level point guard...

            Comment


            • Re: Star Editorial: City should stand up to Pacers

              Originally posted by BillS View Post
              Well, if you hit Scotty's or The Pub or any of a number of other late-night establishments after a game, they are pretty packed and crowded.
              But there aren't "any number" of them. There is a specific number of late night, after-the-game hot spots. You named two. There are a few dozen more. But a serious discussion of the Pacers' impact on downtown requires serious quantification, not abstraction and hyperbole.


              Originally posted by BillS
              And, if you are denigrating these as jobs not worth creating, the very existence of these kinds of places means other businesses might come to downtown because there are places for their employees to go.
              This is deficient thinking, Bill. Certainly the vitality of Indianapolis' downtown relies on, among other more important factors, the availability of lunch for office workers. But there's a sharp line between the noon-day business lunch spots and the late-night booze-halls that fill up for a couple of hours after Pacer games.

              And I do denigrate food service jobs as "not worth creating." The wage scale of that occupational group is so low (even at the top end) that earning a livelihood, supporting a family and building up savings are impossible for 99% of the people doing it.


              Originally posted by BillS
              I'd grant it doesn't have to be the Pacers specifically, anything that brings people downtown 41 times over 6 months would do the same, but you'd have to put in a lot of effort to replace those nights with individual or even short-term events.
              Forty-one nights a year is only 11% of the time. If you consider the impact of Pacer games to occur within two hours after each home game then that's 41 games x 2 hours = 82 hours a year of maximum impact. That is less than 1% of the 8760 hours in a year.

              Bowling alleys are open every night, and yes -- bowling contributes more to the Indianapolis economy than the Pacers do. The public benefit from sales tax on dog food is greater than the public revenue from Pacers tickets. More pizza is sold after movies than after Pacers games.

              I like the Pacers. I hope we keep them and I hope more and more people return to supporting the team. But we should keep them because we're willing to spend our money to support them rather than because of bogus notions of "economic impact" that don't bear scrutiny.
              Last edited by Putnam; 04-22-2010, 10:47 AM.
              And I won't be here to see the day
              It all dries up and blows away
              I'd hang around just to see
              But they never had much use for me
              In Levelland. (James McMurtry)

              Comment


              • Re: Star Editorial: City should stand up to Pacers

                Originally posted by Putnam View Post
                But there aren't "any number" of them. There is a specific number of late night, after-the-game hot spots. You named two. There are a few dozen more. But a serious discussion of the Pacers' impact on downtown requires serious quantification, not abstraction and hyperbole.




                This is deficient thinking, Bill. Certainly the vitality of Indianapolis' downtown relies on, among other more important factors, the availability of lunch for office workers. But there's a sharp line between the noon-day business lunch spots and the late-night booze-halls that fill up for a couple of hours after Pacer games.

                And I do denigrate food service jobs as "not worth creating." The wage scale of that occupational group is so low (even at the top end) that earning a livelihood, supporting a family and building up savings are impossible for 99% of the people doing it.




                Forty-one nights a year is only 11% of the time. If you consider the impact of Pacer games to occur within two hours after each home game then that's 41 games x 2 hours = 82 hours a year of maximum impact. That is less than 1% of the 8760 hours in a year.

                Bowling alleys are open every night, and yes -- bowling contributes more to the Indianapolis economy than the Pacers do. The public benefit from sales tax on dog food is greater than the public revenue from Pacers tickets. More pizza is sold after movies than after Pacers games.

                I like the Pacers. I hope we keep them and I hope more and more people return to supporting the team. But we should keep them because we're willing to spend our money to support them rather than because of bogus notions of "economic impact" that don't bear scrutiny.
                Why, how dare you, you, you, you...







                free market capitalist!

                Comment


                • Re: Star Editorial: City should stand up to Pacers

                  Originally posted by Brad8888 View Post
                  Why, how dare you, you, you, you...


                  free market capitalist!


                  It's been a while since anybody called me that, but...yeah.


                  And just to belabor the point even further, the Bureau of Economic Analysis today released new figures on county income.

                  http://www.bea.gov/regional/reis/action.cfm

                  Marion County's entire earned income for 2008 was $39 billion. All wages from food service employment was $853 million, or 2.1% of the total. That's the total for all jobs in the whole county for the whole 8760 hours of the year.

                  If the Pacers' job creation impact is felt less than 1% of the time (after Pacers' home games) by only a few dozen of the hundreds of food service establishments in the County (those that are downtown and serve drinks after games), then we're talking about less than 1% of less than 1% of 2.1%.

                  I don't know if anyone else is moved, but I've convinced myself that the Pacers job creation impact isn't all that great!



                  .
                  And I won't be here to see the day
                  It all dries up and blows away
                  I'd hang around just to see
                  But they never had much use for me
                  In Levelland. (James McMurtry)

                  Comment


                  • Re: Star Editorial: City should stand up to Pacers

                    You want me to name all the bars and restaurants in downtown Indianapolis that are open after Pacer games and have crowds? While only naming 2 is a small subset, how many would you say is significant? 10? 20?

                    To try to stay out of the rathole, let's just agree that it is very easy to measure first order effects but difficult to measure as the effects move farther from direct.

                    An example I would give is simply to look at downtown Indianapolis 40 years ago vs. today. At 5 pm, those businesses that were located downtown vacated. No one spent any money in the downtown area because there was no one there. You might get a small boost from IRT, for instance, but since there was no regular night business there was no place really to go after a show. Why put in a business if no one was going to show up?

                    The first order effect is that there are no low-end food service jobs, but let's look at one single other business activities that really depends on having those things available.

                    Can you expect to have any kind of convention business if there is no nightlife at all? I would submit the answer to that is a strong NO. I also would submit that convention business is more than low-wage jobs. Never mind construction jobs (which will slow once facilities are built), someone has to manage the facilities, load in and load out the conventions themselves, organize the services for the conventions, interface at a professional level with the organizers (or even provide convention organizers), etc. etc. etc.

                    Yes, the question is always "which came first, the chicken or the egg?" or "Did an individual element have a significant effect or was it a combination of them?" There is also a legitimate debate on whether some amenities like a professional sports franchise have served their purpose by helping create the environment and are really no longer needed to support that environment. However, I think there is no debate over the idea that, while losing one of these things might not hurt in the long run, losing one makes it easier to lose another (say, the Colts once they suck and Irsay demands another deal), then another, and pretty soon it's not a place that is attractive to anyone outside the city.

                    Bottom line is that I think you make a big mistake if you measure only the direct dollars spent on jobs by PS&E or spent by attendees of Pacer games. It goes deeper than that.
                    BillS

                    A bird in the hand is worth two in the bush.
                    Or throw in a first-round pick and flip it for a max-level point guard...

                    Comment


                    • Re: Star Editorial: City should stand up to Pacers

                      I've had this conversation before with others about similar topics, and it goes through three distinct phases:

                      1. "The direct financial benefit of [the Pacers, hosting the Super Bowl, etc] is huge."
                      2. "The direct financial benefit may be small, but the overall influence is huge."
                      3. "Putnam, you're an a**hole!"


                      My first post this morning in this thread was in response to Swingman's comment that job creation justifies any effort to retain any big company. I'm not sure what he meant by that, so I asked him to clarify. If he means that job creation justifies any expense to retain the Pacers, then I disagree. But if he means EnerDel, then I think he's right.

                      We are now at the second phase of the conversation. In order to put a stop to it before I get called an a**hole again, Let me try and be as conciliatory as I can.

                      Certainly the city has done a great job, beginning with Hudnut, of doing many things very well. Certainly the Pacers are a part of that. The team exerts a marginal positive influence to downtown after dark. So do The Red Garter, the Circle Theater, IRT and St. Elmo's Steakhouse, which were all there 40 years ago. So there was always a foundation, and the city wisely built on it to make something much better.

                      As you say, Bill, "It is very easy to measure first order effects but difficult to measure as the effects move farther from direct." I agree with that.

                      But I do disagree with the notion that "everything else" goes into the Pacers account. The Pacers' direct measurable impact (PS&E employment, ticket sales, etc.) is small in scale. Their secondary impact (after-the-game food and beverage sales, building maintenance contracts, etc) is small in scale. I think it's bad science to assume that what we can't measure at all (the Pacers' tertiary influence) has been the preliminary driver of downtown's success.

                      But maybe I'm just an a**hole.


                      .
                      Last edited by Putnam; 04-22-2010, 01:10 PM.
                      And I won't be here to see the day
                      It all dries up and blows away
                      I'd hang around just to see
                      But they never had much use for me
                      In Levelland. (James McMurtry)

                      Comment


                      • Re: Star Editorial: City should stand up to Pacers

                        Originally posted by Putnam View Post
                        But I do disagree with the notion that "everything else" goes into the Pacers account. The Pacers' direct measurable impact (PS&E employment, ticket sales, etc.) is small in scale. Their secondary impact (after-the-game food and beverage sales, building maintenance contracts, etc) is small in scale. I think it's bad science to assume that what we can't measure at all (the Pacers' tertiary influence) has been the preliminary driver of downtown's success.
                        I hope I don't get to the "a**hole" stage; so far the conversation is very reasonable.

                        I think what I want to say is that, while you can't put "everything else" into the Pacers' account, you also can't put nothing into it. The debate over what is an effect, what is a positive effect vs. a negligible vs. a negative effect, and just how much each piece of a multiple-order equation contributes to the whole is exactly why economics is a Black Art as opposed to an Absolute Science.

                        The economy of Indianapolis in general and Downtown in particular is the sum of all the businesses and amenities available. It takes better models than I have so far seen to show not only what contributes but what combination is required in order to sustain everything else. If no single thing is a lynchpin, then clearly some combination (or, more likely, combinationS) would have the same effect - we need to be very careful not to weaken those combinations under the false confidence that getting rid of the single thing has no effect.

                        I am not so much against the concepts you are bringing up as I am against taking the simplest derivative and using it as a final argument.

                        I'd give an example - very few people would argue the effect that GenCon, with some 65,000 attendees for 4 days, has on the economy of downtown in the summer. Understanding that there are significant differences in WHAT people are buying, is there still not some comparable effect of even 12,000 people downtown 41 nights? Do we lose sight of it because it is spread out rather than concentrated?
                        BillS

                        A bird in the hand is worth two in the bush.
                        Or throw in a first-round pick and flip it for a max-level point guard...

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                        • Re: Star Editorial: City should stand up to Pacers

                          Well put.

                          I am content to let that be the last word.
                          And I won't be here to see the day
                          It all dries up and blows away
                          I'd hang around just to see
                          But they never had much use for me
                          In Levelland. (James McMurtry)

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                          • Re: Star Editorial: City should stand up to Pacers

                            Let me throw this angle into the mix:

                            Is the current investment in PS&E getting the best ROI (return on investment) for the city/state/taxpayers?

                            Could that money be put to better use with more direct benefits?
                            Nuntius was right for a while. I was wrong for a while. But ultimately I was right and Frank Vogel has been let go.

                            ------

                            "A player who makes a team great is more valuable than a great player. Losing yourself in the group, for the good of the group, that’s teamwork."

                            -John Wooden

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                            • Re: Star Editorial: City should stand up to Pacers

                              Originally posted by Bball View Post
                              Let me throw this angle into the mix:

                              Is the current investment in PS&E getting the best ROI (return on investment) for the city/state/taxpayers?

                              Could that money be put to better use with more direct benefits?

                              In theory, yes. The best use of public investment would be to help Lilly expand. (And that's the result of real econometric comparisons, not guesswork. An investment in the pharmaceuticals industry would return more jobs, more income and more public receipts than an equal investment in any other sector. )

                              Sadly, Lilly isn't expanding. It is laying off people and evacuating buildings.
                              And I won't be here to see the day
                              It all dries up and blows away
                              I'd hang around just to see
                              But they never had much use for me
                              In Levelland. (James McMurtry)

                              Comment


                              • Re: Star Editorial: City should stand up to Pacers

                                After building a state of the art stadium does the city really owe the Pacers anything else? Is it the cities fault that expectations for the team have gone unfulfilled creating a financial burden? Is it the taxpayers responsibilty to pay for losing ways? Is it the taxpayers fault that players make so much money that ticket prices along with TV revenue can't afford them anymore? How many of the businesses are contributing to the Pacers because they bring in revenue for them? Don't they owe it to the Pacers to buy those expensive suits?
                                Last edited by aceace; 04-22-2010, 05:37 PM.
                                "He wanted to get to that money time. Time when the hardware was on the table. That's when Roger was going to show up. So all we needed to do was stay close"
                                Darnell Hillman (Speaking of former teammate Roger Brown)

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