Does a worthwhile public investment always have to have direct and measurable economic benefits?
This is a question that’s been on my mind a bit lately – I wrote about it in my last post about public expenditures on sports stadiums, a post in which I argued that the lack of any real and lasting economic benefits is a good reason all by itself not to commit public money to that sort of private venture.
But I’ve also been thinking about it form another angle, thanks to a group of people who have come together in an effort to save Tampa Bay’s Friendship Trail Bridge.
The Friendship Trail Bridge was a walking and biking trail made from one of the older (dating back to 1956) and recently-replaced spans of the Gandy Bridge. The Trail Bridge opened as a recreational facility in 1999. It was the only way to (safely) walk across Tampa Bay, and at 2.6 miles long, it made for a pretty manageable walk between north St. Pete and west Tampa.
Just nine years after it opened to the public, the bridge closed – it was an old bridge, after all, and even though it didn’t handle vehicle traffic anymore, it still had to meet certain standards for structural integrity. But the real problem was less about the repairs and more about the projected costs involved: It was slated for demolition after repair estimates came back as high as $48 million.
The group working to save the bridge says there’s no reason repairs have to cost that much. They note that other repair estimates range as low as $7 million, and that the Hillsborough County Public Works department said that a shade under $17 million would generally be appropriate for projects like this one. They’re looking for donations to fund the majority of the bridge repairs, with money from government and foundation grants making up roughly a quarter of the overall repair budget (once they’re up and running, they expect about half of their expenses to be covered by donations, and the other half to be covered by fees and revenue generated by the bridge itself).
And the plan they’ve put together makes it clear that they have a vision for the bridge that goes beyond what was there before. The new Friendship Trail Bridge would have shaded picnic seating areas, floating boat slips, fishing platforms and built-in vendor kiosks.
Their plan also included an economic impact section. I wish it hadn’t.
The group is expecting the bridge to eventually generate between $16 and $23 million in direct spending per year. They used figures from existing, similar walking trails as a baseline, and this number does not include indirect spending or tax revenue accruing from that spending.
Why do I have a problem with this? For one thing, it’s a question of credibility, or at least perceived credibility. Most people will see this number and dismiss it as being ridiculous and untethered to reality. How, they would ask, can a footbridge possibly generate that much extra spending per year? (According to the plan, that money will be generated through special events, parking fees, and vendor fees.)
(Please note that I’m not saying the numbers are wrong. I have no way of knowing that, since I didn’t do the study. I’m simply saying that most of the public is likely to look at those numbers with some skepticism, at the very least.)
The other reason I have an issue with including an economic impact section is that doing so feeds into the mindset that any project must have a tangible financial benefit to be worthwhile. I don’t believe this for a minute. Something like the Friendship Trail Bridge would be an asset to the community regardless of whether it ever generated a single dime in additional revenue. It’s one of the amenities that makes a place worth living in – and intangibles like that don’t always show up in the black on a balance sheet.
So how is this different from a new football stadium? After all, I specifically argued that the lack of any significant economic benefit to a community at large is reason enough not to commit public money to finance private stadiums. Am I not now arguing that economic impact isn’t really that important?
No, I’m not. They are completely different situations. For one thing, the Friendship Trail Bridge will be built mostly with money raised from private contributors, and operating costs are expected to be paid for with contributions and revenue raised by the bridge itself. For another, there is no transfer of wealth from the public coffers to private pockets, no government subsidizing of what is supposed to be a profit-making enterprise. Neither of these things can be said of virtually any private stadium project from the last few decades.
In arguing in favor of rebuilding the Friendship Trail Bridge, the plan explains that the bridge “will help the Tampa Bay area market to young professionals and creative professionals that scout out these types of amenities when deciding where to live or start a new business.” Yes. Studies have shown that when considering relocating to a new place, creatives and young professionals place a high premium on the quality of life they’ll be able to enjoy there. These are the people the Tampa Bay area has to attract if we are ever going to grow beyond a service- and tourism-centric economy here. The potential that holds could end up being far more valuable than the per-year revenue projections.
And really, that’s as much of an economic impact as you should promise.
What do you think? Should the value of a project like this one be determined solely by the economic impact it will have?
Place is everything.
Posted on May 17, 2012
0