21 May 2007

Noll: A's Study "More honest than most"

(See? I can create completely distorted headlines, too.)

Argus scribe Chris De Benedetti got Stanford sports economist Roger Noll's take on the ERA economic impact report. The assessment:

The A's economic report on the proposed ballpark village in Fremont is "far better" than the 49ers' report presented to Santa Clara, said Roger Noll, an esteemed Bay Area sports economist.

However, Noll gives the report mixed reviews overall, knocking the study because its "analysis of fiscal impacts is about revenues only, and excludes costs."

The costs issue hinges on two important details:
  • What additional infrastructure (schools, transit) will be required?
  • What are the mechanisms to pay for it?
When a developer puts up a new neighborhood somewhere, a deal is often made where the developer donates some amount of land for a school, and the new residents pay for the school's construction over time through school bonds or other public means. In Fremont's case, there's a large gray area in that the construction of a school is not mandated in the city's municipal code. Yet there will be such a large influx of students that not building a school could, over time, severely strain FUSD's current school infrastructure. Last week, I covered some creative ways to make this work, even within the framework of the existing redevelopment plan. But they'll still need the land somewhere either within or right next to the village, and that'll take some additional planning - and give-and-take. The report projects $10.7 million coming to the district in the form of development fees. $10.7 million alone won't build a school, but it's a good start.

As for ongoing services such as police and fire, I've given my two cents. I'm of the belief that the project tax revenues will pay for itself. I don't believe that the city will be flush with cash - at least it won't be if the TIF district continues indefinitely. The best way to make this work is to use TIF (if it has to be used at all) only for the school and transit hub. When both of those projects are completed - and the redevelopment agency has reached its tax increment cap - the mechanism should cease to exist. As a result, money would flow back to the city's and county's general funds, and FUSD as well. Only when the tax increment district expires will those groups really start to see serious money roll in.