Experts divided over impact of Browns' arrival Governor envisions $123 million a year and 1,400 more jobs

Lure to firms, or not?

Skeptics say the fans would be spending somewhere anyway

November 07, 1995|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Is it the $123 million-a-year wonder or just another example of hype outrunning reality?

That's the question Baltimore business wants answered about the Cleveland Browns' move to Camden Yards: The governor says the team will create $123 million a year in economic impact and 1,400 jobs, while skeptics think the team will mostly rearrange local spending that would have occurred anyway.

There is justification for nearly any point of view one wants to take. The views of the two leading chroniclers of Maryland's economy, the University of Baltimore's Michael A. Conte and former Johns Hopkins University economist Charles McMillion show some of the contrasts.

"I think it's unquantifiable but huge," said Mr. Conte, director of UB's Regional Economic Studies Program. "The marketing effect is incomparable. Over five years, I wouldn't be surprised if we were in a position to land a few midlevel corporate headquarters, a few business-service operations."

"The key economic thing is the construction spurt this will lead to," said Mr. McMillion, now a Washington consultant who said he was wrong in his early skepticism that Oriole Park at Camden Yards would boost the city much. "In the longer term, it's harder to calculate."

Gov. Parris N. Glendening said yesterday that the Browns' move here will create $123 million in economic impact and 1,400 new jobs. Those figures are based on a study by the Maryland Department of Business and Economic Development (DBED). According to the report, the direct impact of a football team will be $54 million in annual local sales and 854 new jobs, including 71 with the team itself. The other $69 million is an economic multiplier based on assumptions that those 854 workers will spend their wages locally.

The biggest direct impacts will be the $27 million that DBED expects the team to spend on salaries (including an estimate that 57 percent of the players' salaries would be spent in Maryland), maintenance and routine overhead, plus $21 million in projected game-related spending outside Camden Yards by fans. That includes restaurants, hotels and gift shops, said Massoud Ahmadi, an economist with DBED and principal author of the study.

But Mr. Ahmadi concedes a point often pressed by skeptics of public funding for stadiums -- that the report doesn't adjust for the money that local fans would have spent in the area anyway.

Tom H. Regan, an assistant professor of sports business at the University of South Carolina, said the city should not expect Camden Yards II to provide the same boost as does Camden Yards I, which a different DBED study said pumped $226 million into the local economy in 1992 -- including $98 million spent by fans who stayed in the Baltimore area overnight.

"You don't have 3.6 million fans, you have 700,000," Mr. Regan said. "[Baseball fans] spend more money, more times, because they have more dates."

"We're not sure it will be as good for business as the Orioles," said Jill Oliver, manager of The Wharf Rat, a Pratt Street pub. "The [football] stadium is a little farther away, and it's only eight games a year."

Football's impact may also be limited because September and October are among the busiest months for the city's convention business, said Pat Fragale, general manager of the Marriott Inner Harbor Hotel.

"It's only eight weekends a year, of which four to five are already busy times for us," Mr. Fragale said.

The governor's estimates do not include any claims that the team will help Maryland lure corporations to put headquarters or major operations here. An executive at one of the nation's leading corporate relocation firms says that's a good thing.

"We've never had a client tell us they wanted to locate a facility in a particular town because it had a professional sports franchise," said Robert Ady, acting president of PHH Fantus Consulting Inc., a unit of Hunt Valley-based PHH Corp. "Quite frankly, [it means] very little."

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