And surprisingly (!) the study itself is usually performed by some crony capitalist affiliate.
Yep and it probably cost a half million to a million for the study
That’s why new stadiums are getting solar panels and wind turbines.
Here’s the deal with the crony capitalist government funded projects. It’s true whether you are talking about Lucas Oil Stadium, the Carmel Center for Performing Arts (Palladium) or public transit.
1. The capital costs of the brick and mortar is projected to be $X.
2. The actual costs of building same wind up being least $2-3X. And the promoter of the project knows this.
3. The revenue projected to be generated by the project is $X (so the project is supposed to fund itself).
4. The actual revenue projections are wildly inflated. For example, Carmel’s Palladium had a business plan to pay for itself with four sold out performances per week every week of the year. That has never happened, it’s never going to happen, and the promoters fully know this. The real revenue is some fraction of $X.
5. The business plan to sell it to the government NEVER takes into account operating costs to keep the lights on and the staff paid. It’s only bricks and mortar capital costs.
6. Once the public facility is built and commences operations, it’s suddenly “news” that the revenue isn’t paying for the project. The operators go to the public fiscal body and expect them to make good the inevitable shortfall. That has to come out of the current budget every year, or be the subject of an additional bond issuance. Either way, it is not backed by the revenue from the facility, but instead from general property tax or local income tax funds. Of course this leaves less money for real civic services like police, fire, roads and parks.
7. Once the fiscal body agrees to make good the shortfall, it is forever on the hook to continue the subsidy. And once that happens, any incentive for efficient operation as a business model is gone. Why look to contain costs when the local potentates have undertaken the policy of writing a blank check every year?
8. The private operator, event manager or sports team owner forever guzzles at the government money trough, until such time as they grow tired of same and seek a new playground. Then the process is repeated.