Larry Dowell, John Labosky and Karolyn Kirchgesler: NHL lockout is indeed hurting St. Paul (Mpls. StarTribune login: fritopie; password: fritopie)
One of the lingering but little-discussed effects of the cancellation of the 2004-05 NHL season is the impact on the communities that benefit economically from NHL hockey. Restaurants, parking garages, bars, t-shirt vendors…there are a myriad of businesses whose business is either dependent on or who derive significant benefit from NHL game nights.
Downtown St. Paul, MN is no different.
The Star Tribune’s Feb. 11 article stating that the NHL lockout hasn’t significantly affected the economic health of St. Paul painted an erroneous picture that must be clarified.
While we can’t all be Ph.D economists, even a basic understanding of that discipline would tell us that the theory used in your article was flawed. The facts were accurate (the report relied upon data reported to the state and provided by St. Paul), but the interpretation of that data was skewed. We doubt that even your own business reporters, and certainly not hockey fans, would agree that it is consistent with economic theory.
The Star Tribune story compared data from November 2003 and November 2004 and attributed a $15,000 increase in St. Paul sales tax collections in November 2004 — despite the lockout — to the theory that the Minnesota Wild don’t contribute to St. Paul’s sales tax receipts. The fact is that St. Paul’s sales tax receipts are affected by a wide variety of factors and can’t be calculated so simply….
Wild fans aren’t visiting the Capital City in droves and spending the way they would have if every week we heard the puck drop at Xcel Energy Center. With 44 home games and attendance exceeding 18,000 people per game, Wild fans spend an average of $45 per ticket and another $10 on food, beverages or mementos. At the end of the season the Wild generates an estimated $3 million in state sales tax receipts, of which St. Paul receives approximately $217,000 in revenue from its half-cent sales tax — tax revenue generated only inside the arena. Moreover, the St. Paul Area Chamber of Commerce economic impact study of Xcel Energy Center completed in 2003 shows that the Wild brings $23 million in spending outside the arena to St. Paul from nonresidents. Clearly, St. Paul is missing significant sales tax revenue, not to mention the state is losing more than $1.5 million in income tax revenues from player salaries.
A more accurate interpretation of the data would likely support what business owners in and around Xcel Energy Center and throughout St. Paul are saying: Sales are down anywhere from 5 to 50 percent over last year.
In the case of downtown St. Paul, you’re talking about 41 Wild regular season dates. Let’s say that approximately 18,000 people attend each game. If you do the math, well, that’s a hell of a lot of people. Think of the money spent by each of those folks on various and sundry items such as parking, food, alcohol, t-shirts, etc., and it doesn’t take a math whiz to realize that the impact of that business disappearing is anything but insignificant.
IF NHL hockey returns in October, it will be interesting to assess what damage has been done. In the end, businesses may be able to recover, but how do you replace thousands of dollars in lost opportunities? The players and owners aren’t going to have to worry about where their next Big Mac is coming from, but the little guys on the fringes may not be so fortunate.
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