Royals say a new stadium would create 26K jobs. Economists say it’s ‘a bunch of hot air’

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Royals officials recently presented projections of the number of jobs and income they say their proposed Crossroads ballpark would provide to Kansas City and Jackson County. But taking those numbers at face value might not be the whole story, according to experts who study the economics of stadiums.

To help us make some sense of confusing numbers, the Star consulted two economists who have studied and published on how sports stadiums affect surrounding communities: J.C. Bradbury of Kennesaw State University and Andrew Zimbalist of Smith College. They both reviewed the Royals’ slideshow and accompanying press release.

Bradbury said the presentation contained “completely made-up, concocted numbers.” And both researchers pointed to an academic consensus that stadiums do not have a measurable impact on local economies.

Zimbalist described the report as a “bunch of hot air.”

The projections came just days before the April 2 Election Day. In a virtual press conference, Gus Dossett, senior vice president of JLL real estate company, shared the numbers in a five-minute presentation.

These were the experts’ biggest concerns.

Off the bat flaws

Bradbury and Zimbalist were quick to point out that the Royals hired the consulting firm that completed the study, meaning the firm had an economic incentive to show many jobs created and money added to the community.

Royals spokesman Sam Mellinger wrote in an email that JLL’s “work includes much more than economic analysis and they are engaged with us in a broader way with the development.”

Bradbury said, “These reports are done by ‘economic prostitutes,’ that are hired for the purpose of showing a large economic impact, not for providing objective economic analysis.”

Researchers have found that hired consultants use tactics to create large numbers that organizations want.

Royals President of Business Operations Brooks Sherman said the team wants to draw 2 to 3 million fans per year, which is significantly higher than 2023’s 1.3 million attendees. The last time the Royals hit that number was 2017, when 2.2 million fans came to Kauffman Stadium, and they had 2.7 million attendees in 2015 when they won the World Series.

Brooks Sherman said “We certainly feel we’ll get to” those attendance numbers. He said winning baseball and new fan experiences would draw fans.

Bradbury said releasing a team-funded economic impact study is typical of sports teams vying for a new stadium. The standard tactics, according to Bradbury, are “Rushing it through, but also putting out the phony economic impact study that you can claim huge economic benefits.”

Crossroads Ballpark Economic Projections by The Kansas City Star on Scribd

Breaking down the numbers

Dossett of JLL said stadium construction would create $1.8 billion in income from construction jobs and positions in “ripple effect” industries such as manufacturing, machinery, architecture and engineering.

He said this would add 26,000 job-years throughout the region, which is measured as one job for one year. This means a construction worker who builds the stadium for two years would count as two job-years in the JLL report. The number of job-years is likely different from the actual number of jobs created.

Dossett did not explain how he got to those numbers or how many of the “ripple effect” jobs would be in Kansas City as opposed to the greater region.

In the first year of operation of the Crossroads ballpark district, Dossett said they would net 5,400 new jobs with $800 million in economic output from the operations. In the years following, he said the ballpark district would support an additional 3,000 jobs and would provide an additional $400 million economic output each year. The jobs would primarily be in tourism-related industries. Dossett said the “ripple effect” jobs would come from real estate, health care and utilities, among others.

When asked if new jobs would only take workers from other area positions that already exist, Dossett said, “We think that the spending that is generated by this project is enough to create those incremental jobs, so that it is not really substituting jobs from one to another, but creating additional new ones.”

Dossett also said that once the new ballpark and surrounding entertainment district were completed, they would add $79 million in new tax revenue each year. This breaks down to $39 million from tax revenue from new activity in the entertainment district, $25 million from tax revenue from visiting fans and $15 million of additional tax revenue from Royals games.

It’s unclear how the Royals or JLL arrived at these numbers. The presentation did not include an explanation.

The two economists critiqued the lack of methodology or underlying data for the statistics Dossett shared.

Bradbury said, “You don’t just put up a PowerPoint with some numbers. I mean, you can literally just make those numbers up.”

He continued that commissioned studies tend to commit statistical errors, like inflating multipliers and saying observed spending is net new spending. Voters cannot be sure the Royals report doesn’t have these errors without seeing the process, which the team did not provide to the public or make available to The Star upon request.

Bradbury and Zimbalist said academic literature consistently shows that stadiums fail to have a measurable impact on the local economy.

Zimbalist said this is because most of the money spent at stadiums comes from locals. “When they spend $100 at the ball game, that’s a hundred dollars they don’t spend at a local restaurant or bowling alley or wherever.” This means a new stadium is just shuffling residents’ dollars around, not necessarily attracting new dollars.

What else do we know about jobs at a new Royals stadium?

Construction unions have backed the Royals’ campaign for the tax to build a new stadium. And on Tuesday, the union representing stadium workers also endorsed the campaign.

According to a press release from the Vote Yes campaign, SEIU Local 1, Missouri Division, reached a Fair Employment Agreement with the Royals, ensuring Local 1 members working Royals games “can continue to receive the pay, benefits and respect they deserve.”

Other local worker-focused groups walked away from negotiations with Royals after being disappointed by what they described as the teams’ lack of earnest cooperation.

The team’s Community Benefits Agreement did not include wage floors.