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Super Bowl economics



It's the game the city's been waiting for more than four years. But even though the 2-14 Colts aren't playing in this year's Super Bowl, Indianapolis can still lose.

The $720-million Lucas Oil Stadium was built after not-so-subtle hints the team might start loading up the Mayflower moving vans once again and head to NFL-starved Promised Land of Los Angeles. The stadium deal, which critics blast as one of the worst in the history of the major sports leagues, was made slightly more palatable after National Football League officials dangled a Super Bowl — and the accompanying millions in economic benefits — in return.

But while some business owners will see a significant profit in the day's leading up to the Feb. 5 match-up between the Patriots and the Giants, officials with the city's Capital Improvement Board say the agency is likely to lose nearly $1 million on the event.

Earlier this month, a CIB spokesperson told the Indianapolis Business Journal that although they anticipate receiving more than $7 million in taxes from visitors staying in hotels and renting cars over Super Bowl weekend, they will likely spend $8 million after paying for increased police security, overtime costs and other expenses.

That doesn't include the $187 million the city has spent on infrastructure, including $11.5 million used to rebuild Georgia Street into an outdoor entertainment venue.

About 68,000 fans will likely attend the game in person. By contrast, that's about 10,000 more people than attend the average FFA Convention. While the average Super Bowl fan is likely a bit more well-heeled than a blue jacket-wearing teenager, the convention brings in an estimated $30-$40 million in direct visitor spending each year with few mammoth infrastructure investments by the city.

Urban Indy blogger Curt Ailes argues it's an apples and oranges situation.

"The Super Bowl is more of an entertainment option for everyone, while the FFA is more geared toward the students and that industry," Ailes said. "The Super Bowl is the biggest sporting event in the world and brings so many groups together, it deserves a special focus."

The economic impact of a Super Bowl is almost impossible to accurately determine. Studies by Ball State's Michael Hicks and Holy Cross's Victor Matheson disagree sharply about how much the event could bring into the local economy.

Officials estimate visitors will spend $200 million at local establishments over Super Bowl weekend, but Neil deMausse, author of the book Field of Schemes and principal behind the website of the same name, agrees with Matheson that the actual amount will likely only be a fraction of that. Hicks didn't return multiple phone calls seeking comment.

"Any economic benefits brought from the Super Bowl are vastly overstated," deMausse said. "And whatever benefit it will receive isn't going to replace the hundreds of millions of dollars it took to build the stadium.

" ... How do you define 'economic benefit?' Will $200 million change hands that weekend? Perhaps. But will it matter more to Indianapolis than any other city? Probably not. The amount that will stay in the area to benefit residents will only be a small sliver of that."

Most of the money that's brought in by tourists will leave Indianapolis virtually as soon as the last down is played. Super Bowl advocates claim the event will bring jobs to the area, but the latest figures from the state show only a miniscule drop in the unemployment rate in the Indianapolis metropolitan area, dropping from 8.3 percent in November to 8.2 percent in December.

And while downtown bar owners and hoteliers will likely see a spike in profits, visitor dollars aren't expected to flow into the surrounding suburbs. Even though the donut counties pay a food and beverage tax to support Lucas Oil Stadium, restaurant and bar owners likely won't see much of a Super Bowl-related boost in profits from out-of-town guests.

In fact, the Super Bowl and its related activities could adversely affect many suburban entertainment venues. Critics argue many local residents would simply shift their spending from other local sites, such as Carmel's Performing Arts Center or their local movie theater, to festivities downtown, negating much of the promised financial benefit. Traffic and crowd-congestion fears could keep other local residents from venturing downtown — and spending money — at all.

Event proponents claim the event has other benefits, such as introducing Indianapolis to a host of prominent business leaders and decision makers who can decide to bring their businesses or lucrative conventions to the city, but deMausse doubts there will be much of a lasting impact.

"I don't think anyone is going to make a major business decision based on a short limo ride through the city on their way to the stadium," deMausse said. "Corporations decide to relocate primarily because of infrastructure and educational opportunities. If Indianapolis was serious about attracting new businesses to the area, they'd have been much better off putting the money for the stadium and the Super Bowl into improving roads and schools."

Indiana University-Purdue University Indianapolis Professor Susan Hyatt taught a class last year on the effect of major sporting events on metropolitan areas. She declined to delve too deeply into the economic aspects, but said the Super Bowl could be a turning point for the city's image, both locally and nationally, much like another major sporting event was 30 years ago for the city.

"Pride is one of those benefits you can't quantify," Hyatt said. "You still have people talking about the Pan-Am Games and how exciting it was to have so many different people here. It certainly can affect this generation of residents the same way. It's a good thing to make people proud of where they live. We need to hope they (city officials and residents) keep it going, to continue making Indianapolis a great place to visit and live."

Hyatt and Ailes both suggested the Super Bowl could help provoke debate about other local hot-button topics, such as better public transit options.

"Not everyone who comes to the city wants to rent a car, so if we want tourists to return to the city, it's important to have good, reliable public transportation," Hyatt said. "There are going to be special transportation options for Super Bowl visitors, but those will go away (after the game). Better yet, we need better public transportation for the people who actually live here."


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