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Super Bowl Spending: Why We Can't Count on Tourists to Make the City Whole

An influx of free-spending visitors is supposed to more than make up for San Francisco's financial outlay. Anybody remember the America's Cup?

 

America’s public officials have, for decades, sold the citizenry on hosting mega–sporting events as a surefire means of marketing a city while hitting the tourism jackpot. As San Francisco ought to know, however, it often doesn’t work out that way. Take the 2013 America’s Cup, for which the city ended up $11.5 million in the hole overall, thanks in part to contractual language that required fundraisers to “endeavor” to offset civic costs—but did not require them to succeed. The city apparently gleaned an odd takeaway from this misstep: Don’t even bother with endeavoring. The Super Bowl Host Committee has amassed upwards of $50 million to put on a weeklong extravaganza, but is not required to directly put one dollar toward repaying the city for rerouting streetcars and buses or babysitting the fan village.

“What we’re doing,” says committee spokesperson Nathan Ballard, “is bringing money into the General Fund.” Hosting will be a bonanza, he says, “and that will help city agencies.” February, Ballard claims, is not normally a time when hotels are filled. Yet they were pretty full in years past: Statistics compiled by the city controller indicate that hotels were 88 percent full in February 2015; in February 2014, they were 90 percent full. 

Let’s hope that Ballard is right: A windfall based on an influx of free-spending tourists is the fence that city after city has been persuaded to joyfully whitewash by the NFL and its boosters. But a city must generate an order of magnitude more money than it spends for the General Fund to be refilled via sales and hotel taxes (and even then there’s no guarantee that the money will slosh its way back to, say, Muni).

Economists’ analyses of host-city sales tax revenue suggest that the Super Bowl’s fiscal impact is nearly always negligible. “Economists aren’t known to be in great agreement on a great number of things,” says Victor Matheson, an economics professor at College of the Holy Cross in Massachusetts. “But, by agreement, we feel that sports subsidies are a bad idea.”

Budget and legislative analyst Harvey Rose’s office turned up only $308,000 in Super Bowl–related line items in departmental budgets. Needless to say, that’s not going to be enough: A projection of anticipated costs, released by the Mayor’s Office in January, estimated that the city’s expenditures at $4.8 million (Santa Clara, the actual host city of the Super Bowl, negotiated a deal in which it would be compensated for its public costs). And San Francisco's number could rise: Departmental operating expenses for the lower-profile, albeit longer-running, America’s Cup totaled $6.1 million.

“I don’t trust the numbers,” says Supervisor John Avalos. He accuses the mayor's office of of running a "shell game" to obscure the financials from the Board of Supervisors before releasing "inaccurate numbers" to the public this month. Fellow Supervisors Jane Kim and Aaron Peskin said they don't even know who in the mayor's office to blame: Their direct queries regarding who served as lead negotiator for San Francisco have not been answered. “Shame on the city for going forward” without knowing the real costs, sums up Avalos; he and his colleagues will be asking the mayor's office to renegotiate the deal. Ballard, however, is supremely confident. “Every city that’s ever had a Super Bowl wants to have another,” he says. “Nobody says no to a second Super Bowl.”

 

Originally published in the February issue of San Francisco 

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