CLEARWATER — The Philadelphia Phillies bring somewhere around $70 million to Clearwater every year during spring training, the city told Pinellas County in June of 2018.
Then last month, Clearwater quoted the county a much different number. In 2019, the Phillies contributed about $44 million in economic impact during spring training, a city-commissioned study showed.
What explains the 37 percent disparity between the two numbers?
“Quite frankly, we didn’t expect there to be that much of a swing,” said Clearwater Parks and Recreation Director Kevin Dunbar.
Economic impact studies are often a key part of a government’s effort to get public funding for a stadium. They provide numbers a city or county can point to as evidence taxpayers are making a good investment.
In this case, the government in question is Clearwater. The public dollars: $40 million from Pinellas County in bed tax money. And the stadium is the city-owned Spectrum Field. The field, built 15 years ago for $34 million, and an adjacent training complex need $79.7 million in upgrades, the Phillies and the city say.
But experts who analyze the public funding of sports stadiums say economic impact studies are easily manipulated, and the benefits of a publicly funded stadium are easily overstated.
Take the big difference in the two studies. Some of the reasons for the disparity are actually pretty simple. In the analysis with the larger number submitted last year, the city used data from a 2009 study by the Florida Sports Foundation and Bonn Marketing Group to measure the economic impact of Phillies spring training from 2013 to 2018. The city included spending by both tourists and locals in its analysis.
Victor Matheson, a professor of economics at the College of the Holy Cross in Massachusetts, said no economic impact study should include locals.
“That local resident is spending money at the baseball stadium rather than at the local bar and restaurant, rather than at the local movie theater,” Matheson said. “That’s not money that is new to the city, that’s money that’s just shifting around.”
The study submitted by the city last week is more conservative. It does not include locals in its analysis, and it bases its economic impact projections on unique attendees of games as opposed to individual attendees. (For example, if Jane were to attend two games, she’d be counted as one unique attendee, not two total attendees.) The city paid Downs & St. Germain Research $15,000 to conduct the study.
John Timberlake, the director of Florida operations for the Phillies, said the $44 million figure was not indicative of the Phillies’ true value to the city during spring training. For instance, Timberlake pointed out, the spending of Phillies players who have a second home in Clearwater is not counted.
“I’ve never seen any numbers that came out in this neighborhood,” Timberlake said of the study.
But even the less generous economic impact figure reported by Downs and St. Germain seemed an overestimation to Smith College Economics Chair Andrew Zimbalist.
An essential part of an economic impact study is something called a multiplier, which calculates the real effect of one dollar spent at an event. For instance, a dollar spent on a hot dog could theoretically be re-spent by the hotdog vendor at a local bar, turning one dollar spent by a tourist into two dollars in economic impact.
Zimbalist said Downs and St. Germain’s $44 million estimate is artificially inflated by a multiplier that is too optimistic.
Joseph St. Germain, the president of Downs and St. Germain, defended his firm’s report. He noted that the economic impact study was based on data gathered via surveys taken during the Phillies 2019 spring training. They then ran that spending data through a multiplier model called “IMPLAN” which is used by over 1,500 organizations, such as the Federal Emergency Management Agency and the Federal Reserve, St. Germain said.
“I have seen other studies and other professionals do it in a way to create the highest number that they can,” St. Germain said. “In our estimation, it’s more important for us to be accurate as opposed to putting up a big number.”
In 2018, Clearwater signed a deal with the Phillies that would leave state ($13.7 million), city ($16 million) and county ($40 million) taxpayers on the hook for all but about $10 million of the project. The Phillies would also pay for any potential cost overruns — which Timberlake said could be significant.
Clearwater first applied for the money in the summer of 2018. It withdrew that application when the county changed its guidelines for stadium funding proposals in the fall, Dunbar said.
Now, the city is in the process of submitting a second application. In January, the County Commission voted to let Clearwater start negotiating with the Tourist Development Council, which controls the bed tax money — a six percent tax on hotel and motel stays intended for capital or marketing projects. (The Downs and St. Germain economic impact study showed that Phillies tourists pay about $408,000 in bed taxes annually.)
After those negotiations, the Tourist Development Council will make a recommendation to the commission, which will vote on the plan.
Just last year, the county gave Dunedin $41.7 million in bed tax money to help fund the renovation of Florida Auto Exchange Stadium, the spring training home of the Toronto Blue Jays, as well as the Englebert Complex, a team training facility.
But at a January meeting, several county commissioners seemed hesitant to give so much money to the Clearwater facilities, which are far newer than Dunedin’s.
Matheson, the professor, said taxpayer-funded stadiums rarely make economic sense.
“The stadiums teams want are terrible economic engines,” Matheson said.
Clearwater officials disagree.
Mayor George Cretekos said the Phillies, which have trained in Clearwater since 1947, give a year-round economic boost that can’t necessarily be captured in a report about one year of spring training.
Dunbar, for his part, described a typical day on at Clearwater beach during spring training. Take a trip down the Memorial Causeway in March and you’re greeted with wall-to-wall red team gear, he said.
“I’m an eye test kind of guy, Dunbar said. “The Philadelphia sports fan is coming here in droves.”
Contact Kirby Wilson at [email protected] or (727) 893-8793. Follow @kirbywtweets.