Please note: This is a very long post which details my observations made at a meeting pertaining to the BPAC. If you’re not interested in all of the gory details, please click here: to jump to the most important information found near the end of this post.
Yesterday I attended the Economic Development Association of Minnesota‘s Third Thursday Event which took place at the Burnsville Performing Arts Center. The purpose of the event was to provide Burnsville the opportunity to showcase exactly how the BPAC is utilized to draw in more business to Burnsville and how it has a positive effect on the local economy.
From the event page:
Richard Florida, author of the Rise of the Creative Class, defines successful economic development as the attraction of skilled workers because companies in the 21st century will go where the work force exists. To accomplish this attraction, cities need to provide the amenities that a skilled worker desires, one of which is an attractive performing arts culture.
Learn how the Burnsville Performing Arts Center has become an integral part of Burnsville’s plan by anchoring a 54 acre redevelopment project, providing opportunities for the local arts groups, the school district, attracting visitors, and giving Burnsville a magnet for a highly educated and skilled work force.
In the past two years, Burnsville has attracted over 90 new companies, and boast of a regional shopping center that has rising sales and an occupancy rate of 97% during that time.
In an article entitled, “Beautiful Cities,” in Alternatives Journal, Winnipeg went through a time where they concentrated on erecting buildings which were functional and easy to build but found the city, “lost the sense that anything they had that was unique or authentic had any importance or value.” The article claimed that the city later realized that by quantifying, “investments in culture and built environment in terms of dollars and cents,” it forced a situation in which the city, “fails to account for the revenues, the new jobs, the export, the investment, the property value, and the cost-effectiveness of not having to building new things because they have invested in existing neighbourhoods.” We all know that Burnsville has been trying to years to justify the extensive public tax burden of the BPAC by explaining it in similar terms such as the huge impact the facility has had on Subway’s business on one particular day.
The presentation began with Tom Hansen (Deputy City Administrator of Burnsville) welcoming everyone instead of Mayor Kautz who was on very important business for the US Conference of Mayors in Las Vegas providing background on the BPAC including its expected economic impact from studies done more than 5 years ago and the politically charged atmosphere which he assured everyone had died down. His main points included:
1. The Mediterranean Cruise Cafe would not be located next door and would not be catering the luncheon if it weren’t for the BPAC. Some may argue that it was the park next door and the need for a filtration system for its water features, never intended to be used for swimming, in addition to Eagan’s controversial eminent domain seizures which were the true reasons for the move.
2. If a hotel had been built, as was originally proposed but never came to fruition being that the city is usually only at about 50% hotel capacity at any given time, it would have generated an additional $227,000 in tax revenues.
3. $1.25 million is the estimated economic impact of the arts center as defined by 50% BPAC occupancy for 104 weekend days (~52,000 people) spending an average of $25/day.
Jon Elbaum (BPAC Executive Director) presented next and provided a variety of bullet points about the BPAC and how it operates including:
1. Providing world class entertainment and a special experience for corporate clients by breaking the mold of the traditional empty square rough shell of box seen in usual convention center spaces and offering a well designed space which flows to utilize instead.
2. Mr. Elbaum noted he conducted a small economic impact study through the Americans for the Arts and it was determined that the BPAC provided $2.7 million in overall economic activity and a total of 76 FTEs in the community something Mr. Elbaum believes is pretty impressive.
3. The demands on the calendar are such that Mr. Elbaum notes they are beginning to turning away business showing the growth the center is now experiencing.
Amie Burrill (Executive Director at Burnsville Convention & Visitors Bureau) was the final presenter and gave a couple of supporting points to the bullets mentioned by Mr. Hansen and Mr. Elbaum above including:
1. Dance competitions and comedians show an uptick in hotel stays and packaged events (tickets + hotel + food).
2. Grande Market Square has seen a recent increase in the number of inquiries for the vacant restaurant space there.
3. While they have been discussed, no actual impact studies have been done by the CVB on the BPAC’s addition to the city.
After the meeting was over I had questions for both Mr. Elbaum and Mr. Hansen so I contacted them both via e-mail. Both were kind enough to provide responses and/or put me in touch with those who would be be able to answer my questions.
1. I was interested in knowing how the City of Burnsville arrived at the number 90 for new businesses added to Burnsville in the last two years. The statements provided in the pre-meeting documentation seemed to lead people to believe these new businesses were directly attributable to the BPAC and related redevelopment efforts in the HOC. I was particularly interested in any data the city may have had on the number of businesses which left the city during the same time to be used for comparative purposes. I contacted Mr. Hansen who put me in touch with Skip Nienhaus, Burnsville’s Economic Development Coordinator. Mr. Nienhaus stated, “our information on how many come each year are derived from permits pulled for construction or build out, information from our building owners, information from our chamber, and general observation. We do not track how many businesses leave on a yearly basis.” In other words the “90” number provided is a rough estimate and being that no comparative data is available no one, not even the city, has any real idea if 90 new business is good or bad or even what the reasons were that they opened their doors in Burnsville.
2. Out of all of the points raised during the three talks, Mr. Elbaum’s statement that he had conducted, “a little economic impact study of the BPAC done by Americans for the Arts,” interested me the most. While many other statements about the impact of the BPAC were based solely on guesses, some not even educated, Mr. Elbaum was presenting what he claimed was data derived from an actual study. I went to the Americans for the Arts website and found that the nonprofit had in fact conducted a nationwide economic impact study in 2005 and even provided extensive documentation to back it up. Excited I dug further looking for what Mr. Elbaum had done for the Burnsville Performing Arts Center. What I found out was shocking.
Following an e-mail conversation with Mr. Elbaum, I learned his “little economic impact study done by Americans for the Arts” consisted of nothing more than entering three numbers (population range (50,000 – 99,000), optional total expenses ($1,100,000 was used), and total attendance (a number which Mr. Elbaum estimated and arrived at 70,000)) on the Americans for the Arts website, hitting submit, and coming up with a variety of misleading talking points based on national averages from 2005 (prior to the economic downturn) to give an estimate of the economic impact of an arts facility on the town in which it resides. To be blunt: no study was conducted for the BPAC and for a man who proudly announces to others that almost all of what is said on this website is inaccurate, I have to admit I am embarrassed for Mr. Elbaum as purposefully misrepresenting 15 seconds of data entry and clicking “submit” as a “study” and piggy backing on the hard work that Americans for the Arts did to provide valid information to the public about what value the arts have on their communities is something which is wholly inaccurate.
What do you think of the points raised during yesterday’s meeting? Do you believe that the BPAC is making a positive economic impact on Burnsville? Are you in agreement with those presenting and in attendance that assumptions are an excellent way to provide information about the economic impact of a taxpayer funded facility? Whatever you have to say about the BPAC and its economic impact go ahead and comment on as I’d love to hear what you have to say.