A New Arena No Matter What

Via the Post Gazette:

Isle of Capri, which is a partner with the Penguins in a casino and arena
plan, already had committed $290 million towards an arena.

But today, Mr. Onorato said two other companies that were not partners with the Penguins — Forest City Enterprises and PITG Gaming — have now also made commitments. Both have pledged $7.5 million a year for 30 years toward construction of an arena. Mr. Onorato said both commitments are contingent on a company getting the state license to operate a casino and on the Penguins committing to staying in Pittsburgh.

So the probability of the region getting a new arena is probably aroung 98% as of today. Speaking as a Red Sox fan, I have great faith in something, somehow screwing the process up. PITG and Forest City Enterprises have committed to funding Plan B.

Now I am not a big fan of slots gambling as a tool of economic development as the negative externalities are high, and the specific nature of the PA allocation process means that all participants have an almost fiduciary responsibility to lie their asses off in order to get ahold of monopolistic profits. I am also not a big fan of arenas as an economic development tool because the empirical evidence of a positive regional employment or income impacts is next to nill. The best argument for professional sports teams as a policy issue is dependent on how much you value regional pride in a team (I buy this argument easily with the Steelers, not so much with the Penguins or the Bucs). Sometimes a new arena is cheaper than a regionwide prescription of Zoloft……

But I am just a blogger with no real influence on the decision processes that have gotten us to this point. At this point, the best decision for the region is to get the best deal and pray that the actual numbers are not too far from reality over the next thirty years despite the fact that we know there is a very high probability of West Virginia approving table games as soon as they see their profit streams slow down, despite the fact that it is very likely other nearby states will open up their own slots parlors, thus contributing even further to the percentage of money that is being spent in Pittsburgh that is just diverted from other regional expenditures instead of being “new” money… we just have to hope that is not too screwed up….

So if one can trust the Forest Cities Enterprises numbers then Station Square makes the most sense — get as much revenue into the city and thus increase the tax revenue take as well as having the largest facility with the greatest property tax bite…. That makes the most sense if their numbers are trustworthy, or at least within the same realm of fantasy as the other two parties. So far my reservations on their numbers for jobs stand…but expect some momemtum to go this way.

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