Part One of Three: Economic Benefits of a New Arena
In just one week, we will know the outcome of the primary election and the future of the Rushmore Plaza Civic Center. On the ballot is an issue to authorize the City to bond for up to $110 million to build a new arena on the Civic Center complex.
A “yes” vote gives the complex new life and sets us on a course for larger and improved events, more economic impact and enhanced quality of life. A “no” vote, will place a Band-Aid on the Barnett Arena and will keep its current decline in progress. By my estimation, in as few as 10 years we may be faced with the decision to infuse General Fund tax dollars into it, board up, or demolish the Barnett Arena. This would certainly close what has been historically a very popular, well-used and beneficial component to our community. A new arena will be financially self-sufficient and will not increase taxes.
To date, I have held a total of 57 presentations on the matter, and have spoken to over 2100 people face-to-face about this issue. I have come to learn that there are still sticking points and need a better explanation or justification. One of them is economics.
Rapid City is a visitor destination and we have been regarded as such since 1890. In Pennington County, there are 10,131 jobs that directly or indirectly exist due to the visitor industry.
In a 2017 scientifically-valid survey, Rapid Citians rated economic stability and growth as the number two priority behind Public Safety. Rapid City has little problem attracting visitors during the “on season” and since 46% of our general fund budget revenue is made up of sales tax, we are left with significant reductions in revenue following the tourist season until Christmas and after Christmas until the beginning of tourist season. Rapid City doesn’t need to spend a great deal of time and energy trying to get more visitors here during June July and August. The off-months are the challenge and are historically the months when the majority of arena activity occurs. With the slow but steady decline in the usage of the Barnett Arena due to it’s outdated architecture, this is only making matters worse. A new arena, although never promoted as a ‘magic pill’, would certainly serve to bring visitors into our area in the off-season. Our visitors spend money, and a great deal of it. What’s more, the 10,100 people employed in full or in part by the visitor industry spend a great deal more money all year long.
A local economy is a closed system until it figures out how to bring in outside money. This can be done with exports such as manufacturing widgets to sell to people from other states or countries; it is done with agriculture when we export our livestock, farm goods and trees. This is also done with tourism, yet we don’t have to manufacture anything other than providing a welcoming destination for visitors from all over the world to travel. An economy only grows with outside money, it remains stagnant with the lack of it.
Building a new arena is a smart economic decision. It will benefit us all, even if we don’t attend events there. More sales tax revenue means less dependence on other revenues, such as property tax. It also provides more options for entertainment, recreation and quality of life.
Tomorrow’s topic: Parking