Last week, some of Atlanta's most powerful businessmen and elected officials did their best to sell Atlanta to visiting NASCAR officials, who are looking for the ideal home for a NASCAR Hall of Fame.
The NASCAR officials had lunch with Gov. Sonny Perdue at the Governor's Mansion. Home Depot co-founder Bernie Marcus personally gave them a sneak peek of the Georgia Aquarium, which is scheduled to open Nov. 23. And the trip concluded with a NASCAR-themed pep rally at Centennial Park, hosted by Mayor Shirley Franklin.
But that was all pomp and circumstance. The real bait is a $92 million financial package, including city and state taxpayer dollars, put together by the metro Atlanta business community to pay for the 100,000-square-foot museum, according to A.J. Robinson, president of the nonprofit downtown booster group, Central Atlanta Progress.
The city will pitch in a minimum of $5 million and the state $25 million, Robinson says. The remaining $62 million will come from corporate donations and conventional bank loans. Robinson would not disclose who will take out those loans or other specifics about the NASCAR bid.
Atlanta is fiercely competing with four other cities -- Charlotte, Richmond, Va., Kansas City, Kan., and Daytona Beach, Fla. -- to lure the museum, which will generate an estimated 2,000 jobs and $1.3 billion in revenue over 10 years, according to Central Atlanta Progress.
But the actual economic benefit is a matter of debate. With all five cities caught up in the thrill of a bidding war, will a sweetheart deal, while a boon to NASCAR, be a boondoggle to the general public?
Four of the five cities are offering taxpayer dollars to fund a museum enshrining a corporation that generates an estimated $3 billion annually. While Atlanta is offering to fund about a third of the museum's construction costs with public funds, Charlotte has proposed raising taxes to cover about three-quarters of the costs. Kansas City and Richmond officials haven't made public the specifics of their bids but have indicated the bids will include public funds.
Daytona is the only city that won't pledge any taxpayer money, since the Florida Legislature rejected a plan to spend $30 million of state funds on the museum. The $107 million Daytona has pledged would come from corporate donations.
"NASCAR is most likely, under any scenario, not spending very much on anything," Robinson says.
And it's not just NASCAR. In what is now the norm, states and cities attempt to lure permanent tourist attractions, sports events and franchises, and big industries with promises of multimillion-dollar tax breaks.
What's more, while the economic benefits promised almost always hold true, the vow of a big payoff to the public doesn't always pan out.
For instance, to convince cities to publicly fund new stadiums, the NFL uses the argument that one Super Bowl will generate between $300 million to $400 million for the host city's economy. Thus, a single Super Bowl would more than cover the average taxpayer contribution, $209 million, to fund a new stadium.
But professors of economics Robert A. Baade of Lake Forest College and Victor Matheson of Williams College refute the NFL's numbers. They performed an analysis on the economic impact of every Super Bowl between 1970 and 2001. Their results, published in 2003, show that the revenue generated by a Super Bowl is typically 10 percent to 25 percent lower than what the NFL claims.
Super Bowl XXXIV, held in 2000 in Atlanta, was an even bigger letdown, generating just $139 million -- $271 million short of what boosters predicted, according to Baade and Matheson.
Even the 1996 Olympics didn't live up to promises. That year, Georgia's economy grew by 4.5 percent, while the average for the previous three years was 5 percent.
And while the 2003 NBA All-Star Game held in Atlanta generated $27 million in revenue, according to the Metro Atlanta Chamber of Commerce -- $2 million more than projected -- the event paralyzed the city with traffic. Some businesses prospered, but others failed miserably. Lenox Square, Phipps Plaza and Greenbriar Mall all had to shut down early because of the sheer numbers of NBA All-Star-goers, many of whom were not spending money, retailers reported.
Though the NASCAR Hall of Fame is a permanent attraction with a sustained ability to draw tourists, there's still no guarantee that the museum will deliver on downtown boosters' projections, according to Neil deMause, co-author of the acclaimed 1999 book Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit. DeMause says tourists would be just as likely to spend money on other things if there was no NASCAR museum here.
"If people go to a NASCAR museum, they are probably choosing to not go to a baseball game that weekend, or to a theme park, or something else that's a moderate- to big-ticket entertainment item," he says.
Franklin, Perdue and Central Atlanta Progress disagree. CAP projects that the NASCAR museum will generate an additional $124 million statewide each year in exchange for a $25 million state contribution -- what Robinson characterizes as "a one-time package" and not "ongoing support" -- and a $5 million city contribution, funded by the creation of a tax allocation district.
A TAD, which generates income through future raises in property taxes, is the same method officials hope to use to finance the Beltline, a proposed 22-mile loop of transit circling the city. Predicted to move 90,000 people a day when completed, the Beltline is a project with far more tangible benefits to the public than a race car museum. The Beltline has its own boosters, too, though they've so far been unable to convince the state to pitch in a dime for its construction.
Marcus, at least, is using his own money to build the $200 million Georgia Aquarium, which is estimated to attract as many tourists as the NASCAR museum. The aquarium also will offer children a rich educational experience -- something NASCAR officials can't claim.
The NASCAR museum likely will draw new life into downtown, however, encouraging pedestrian traffic, disposable spending, and, when combined with the aquarium, perhaps a reason to stay in Atlanta one more night.
"Folks may believe [publicly funding the museum] is corporate welfare," Robinson says. "But it's the kind of welfare we need to help our whole tourism infrastructure, our restaurants, hotels, our transportation. ... When you're building a $92 million project and the return is $1 billion over 10 years, that trickles down into jobs and people's livelihood."
He adds: "All I can tell folks is that's just part of the landscape in order to compete today."
Are my nards going to get irradiated?
sarcasm, and the lost art therein.
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