THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, November 27, 1995 TAG: 9511250105
SECTION: BUSINESS WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Editorial
SOURCE: Ted Evanoff
LENGTH: Medium: 85 lines
While a pro football team sounds like fun, Norfolk has better things to do with its money than refurbish an old stadium for the Canadian Football League.
Throughout the nation, governors and mayors assemble big financial deals intended to build up their cities.
Now we see this unfolding in Hampton Roads with the Shreveport Pirates, a CFL franchise headed by Lonie Glieberman of the Detroit area.
Pirates officials, who lost about $3.5 million in Louisiana, understand Hampton Roads wants a sports franchise able to unite and give a major league image to a diverse region of 1.5 million people.
And they know the one city organized as Tidewater's hub, Norfolk, will shell out cash on a professional team.
Last week the Pirates asked the city of Norfolk to pave the way for their relocation by spending $400,000 to improve Foreman Field, the 25,600-seat stadium at Old Dominion University.
Pirate officials figured their franchise would produce $240,000 a year in taxes for the city, assuming 15,000 people attend each of 10 games at Foreman.
Rooting for a football team might give Suffolk and Virginia Beach a common interest with Williamsburg and the Outer Banks of North Carolina. Sharing a team can help Hampton Roads build a regional identity.
Norfolk surely can gain sales tax revenue from the games, but remember, most of the money spent in the stadium would be spent by residents of Hampton Roads. The cash is already here.
Instead of buying tickets to, say, the Hampton Air and Space Museum, or the classic Commodore Theatre in Portsmouth, people would have a new diversion, a football game in Norfolk.
Trouble is, football teams bring little cash into the region, especially CFL franchises without lucrative national TV contracts.
The Pirates will merely reshuffle the money in the community without putting Tidewater on the major league sports pages.
Let the Pirates come. But let them fix up Foreman with their own money.
Purely in economic terms, Hampton Roads would be better off by handing $400,000 to a manufacturer as down payment on $1 million worth of new machinery.
For one thing, a manufacturer in Norfolk would pay about $16,000 a year in property taxes on the new equipment.
If the company hired 10 new machine operators at $25,000 salary, total sales taxes on their families' purchases roughly would total $10,000. And if each worker bought a $70,000 house in Norfolk, city property taxes on the houses would near $10,000.
That adds up to $36,000 in taxes, far less than the $240,000 the Pirates might generate, but if the manufacturer's new machines turn out parts for, say, Stihl Inc. in Virginia Beach, and Stihl sells its chainsaws worldwide, that $36,000 essentially comes from places such as California and Texas, France and Japan.
It's new money flowing into Tidewater.
Communities get rich by producing services and products they sell to the rest of the world - Hollywood would shrivel if its movie audience consisted only of Los Angeles.
And communities draw down their wealth by buying products and services produced elsewhere - Ohio gets the jobs and taxes if Stihl uses a Cincinnati machine shop instead of one in Tidewater.
Replacing imports and stimulating exports is economic development. But Hampton Roads hasn't excelled at this.
Stihl expanded its own injection molding shop when it couldn't find a plant on the East Coast able to make a chainsaw casing out of reinforced nylon. Tidewater was fortunate Stihl had the resources to expand.
Atlantic Group of Norfolk services electric power plants, but farmed out production of its new condenser unit to Utah. Atlantic couldn't find a capable plant in Virginia.
Katec Inc. in Virginia Beach invented and sells environmental tools, but western New York's economy benefits the most. Much of the machining and assembly takes place near Buffalo.
``I don't manufacture here because I don't have access to the factories that make the small runs of precisely machined parts that I need,'' Katec founder Michael Campbell said.
``I think in the past you had the shops here, but when the shipyards cut back, it dissolved them.'' by CNB