SAN ANTONIO – Experts told KSAT a report meant to show city council members the economic benefits of Project Marvel is “useless” for making an informed decision.
The city commissioned CSL International to perform an economic impact analysis for the multi-billion-dollar plan to create a sports and entertainment district in Hemisfair, including a new Spurs arena. As council members debate how much public money they should pump into a possibly $1.5 billion arena, the resulting benefit to the city is the biggest question.
In a report posted Wednesday, CSL estimated how much new spending, tax revenue, and jobs could be generated through some of the core projects within the larger Project Marvel: expanding the Henry B. González Convention Center, improving the Alamodome, turning the former John H. Wood Jr. federal courthouse into a concert venue and various mixed-use developments.
CSL specializes in the sports, entertainment, hospitality and leisure industries, and has offices in Frisco, Minneapolis and New York City. It is estimated that spending tied to all four projects, or “economic would amount to roughly $500 million in a given year.
Over the course of 30 years, the consultant estimates the projects would have an economic output of $18.7 billion and bring in $351 million more in city taxes.
Though it did not directly analyze the economic impact of a new Spurs arena, CSL said it had reviewed the summary findings of the team’s consultants. The economic output of a new arena would be about $318 million more than what the city is already seeing through the Frost Bank Center, CSL wrote.
However, three economics and public affairs professors who reviewed the CSL report told KSAT that council members should not rely on it for decision-making.
“Economic impact reports, from a policy standpoint, are completely useless,” said Geoffrey Propheter, an associate professor of public affairs at the University of Colorado-Denver. “Even if they’re done perfect, even if they’ve done perfectly well, they still provide incomplete information for policymaking.”
The reports only focus on perceived benefits, he said, while ignoring the costs, including what alternatives a city could be pursuing instead.
One of the most significant issues, he and other experts said, is that economic impact reports are often used to justify projects someone has already wanted to pursue.
“You don’t get to be wealthy as a consultant by telling the people who hire you that their ideas are bad,” said Dennis Coates, a professor at the University of Maryland-Baltimore County.
Coates co-authored a 2022 survey of more than 130 studies over more than 30 years published in the Journal of Economic Surveys that concluded, “nearly all empirical studies find little to no tangible impacts of sports teams and facilities on local activity, and the level of venue subsidies typically provided far exceeds any observed economic benefits.”
Asked whether the CSL report would be useful for council members making decisions about Project Marvel, Coates said there were two answers.
“One answer is based on the assumption that they want to have real information about the costs and benefits. If, in that case, useless. Doesn’t provide anything,” Coates said. “If what they want is cover for doing what they already plan to do, it’s perfect. And that’s its purpose.”
Coates said he was suspicious of the CSL report’s specific findings because there wasn’t much clarity about how the report was done, what assumptions were made or how they were justified.
David MacPherson, Chairman of the Trinity University Economics Department, also said there were “few details” on how the report was created, making it hard to evaluate it critically.
MacPherson said the consultants assumed “optimal utilization” of all the new projects, such as the renovated courthouse hosting 60 concerts a year, and it was unclear how well the report accounted for some of the projected “new” spending actually being a shift from existing venues over to Project Marvel.
“So I think it’s really misleading to rely on these kinds of analyses to justify the building, with public dollars, of a facility that overstates the benefits,” MacPherson said.
A CSL spokeswoman appeared to be out of the office Thursday and did not respond to a text message request for an interview.
However, representatives of the firm are expected to be present for a discussion of the report at an Aug. 6 San Antonio City Council meeting.
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