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What City Hall isn't willing to hear about the new arena

This is what Rosentraub has to say about Dallas and its current predicament.
For one thing, if we lost the Mavs and the Stars tomorrow, it wouldn't hurt the Dallas economy a bit--the effects would be negligible.

To prove his argument, Rosentraub produced 1991 statistics (the most current available) that he obtained from the U.S. Department of Commerce showing the importance of professional sports to the strength of the Dallas County economy.

Of the $30.7 billion in total payroll dollars generated countywide, 29 percent was generated by service industries (such as EDS and UPS), 18 percent by manufacturing, 12 percent by finance, insurance and real estate, 11.5 percent by the wholesale business (such as trucking) and 11.5 percent by transportation (like D-FW Airport). Only .16 percent--just over a tenth of one percent--came from professional sports. The numbers remain consistent when you look at the number of actual jobs created countywide. Of the 1.1 million jobs held in 1991, only .07 percent resulted from pro sports. (The addition of the Stars to the equation would have neglible effect.)

"Professional sports is nothing more than a frill," Rosentraub says. "On the other hand, if you don't have manufacturing, services, finance, insurance, real estate and transportation, you're not going to have sports. You couldn't afford it. You wouldn't have enough money to support it. You'd be Abilene."

While the residents of City Hall have spent much of their time and energy trying to keep economically insignificant pro sports franchises from leaving Dallas, they have allowed, on a daily basis, some of the economic heavyweights Rosentraub describes to walk right out the door. Last month, while the Morning News wrote front-page stories and editorials on the arena crusade, the announcement that Mary Kay Cosmetics--a corporate resident of Dallas for 32 years, with 500 full-time employees at its Regal Row headquarters building--was moving from Dallas to Addison barely rated a story on the business page.

Although Mary Kay officials say that Mayor Steve Bartlett worked extremely hard in the end to keep the headquarters in Dallas (the company is keeping two warehouse operations here), they also point out that it took city officials three years to respond to their requests for a right-hand turn lane from Regal Row onto the Stemmons Freeway service road.

"The real danger in all of this is if you start believing the economic myth of sports, the result is you divert a city's attention from its quest for its real economic advantage," Rosentraub told the planning council. "If you don't build sports facilities, but you're thinking of making other kinds of investments, there are things that will give you a greater return. And you must stay focused on what really drives corporations to locate to a place: an educational system, a transportation system, an energy system."

What did Peterman, the acting head of the city's economic development department, which employs 23 people and spends $1.2 million a year to get the most bang for the city's investment buck, say about Rosentraub's numbers and his common-sense interpretation of them?

"Very interesting," she told me last week. "It's a contrarian point of view. [But] I do think there are negative impacts if we don't have the teams that would be felt by local restaurants and the West End."

Peterman, slated to become head of the city planning department on March 1, said she has no numbers, no hard evidence, to back up her claims. "I don't know enough about it to disagree."

Restaurants, in truth, contribute only a tiny portion of jobs and salary dollars to our total economy. While Rosentraub does agree that individual mom-and-pop bars in the West End will suffer if the teams relocate, restaurants and hotels contribute so little to the economy countywide that the loss of the teams would have zero effect.

"The West End merchants will suffer, but is the loss so large that it will affect the Dallas economy?" he says. "No. Look at the numbers." (The numbers show that only 2.8 percent of all payroll dollars countywide came from restaurants and entertainment in 1991; one percent came from hotels. Likewise, restaurants and other entertainment made up 7 percent of total jobs countywide; hotels 2 percent.)

But if the teams stay, West End merchants could be hurt, too. "You have to be careful--you put restaurants [inside] a new arena, which Dallas wants to do, and you can hurt the West End," Rosentraub says. "You put a TGIF, a Taco Bell and a McDonald's in there, and that's a problem for the West End. In Toronto's Skydome, McDonald's serves 20,000 meals a game and employs 1,500 people to do it."

Rosentraub makes another interesting point. While arena proponents talk ad nauseam about the considerable "economic impact" of a new sports arena on area restaurants, arena concessions and hotels, Rosentraub says the word "impact" should be the first clue that the argument is specious.

"Economists will use code words--if they use the word 'impact,' impact is nothing," Rosentraub says. "If I steal a watch, that's economic impact--I have it, you don't. Growth is something. Impact is just stirring up the pot."

For example. To believe that a new sports arena will spark increased spending on food, you have to believe "that people are going to become larger and eat six meals a day," Rosentraub says. "You're going to eat dinner regardless. If you eat in Don Carter's new arena versus Mark Rosentraub's restaurant, that's impact. He has more. I have less. No growth."

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