‘Dribble-down’ theorist set to back Ratner’s Nets arena plan

The Brooklyn Paper
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Call it the “dribble-down” theory, the foundation of “Ratneromics.”

Just as President Ronald Reagan had David Stockman to sell his “trickle-down” theory, developer Brice Ratner has hired a noted sports economist — one who has regularly described arenas and stadiums as having no direct economic benefits on local economies, no less — to help sell his plan for a Downtown Brooklyn arena for the New Jersey Nets.

In a discussion with The Brooklyn Papers this week, Andrew Zimbalist, who next month will hand over his Nets arena study to Ratner, made several broad assumptions about the Nets coming to Brooklyn — namely that a significant number of New Jersey fans would follow their team to Brooklyn, that a large number of New Yorkers attend the Nets games now and that the housing component of Ratner’s development would draw more people to New York City.

Ratner hired Zimbalist, a professor of economics at Smith College, in Massachusetts, who has written several books on sports economics, to conduct a study of the fiscal impacts of the 19,000-seat arena and office and residential complex he wants to build at the intersection of Flatbush and Atlantic avenues.

“In normal circumstances, arenas do not have a positive effect, but a tremendousness fiscal drain,” Zimbalist told The Papers this week.

So what makes Ratner’s project different?

“This project will be different because tax revenue from the Nets that currently go to New Jersey will go to New York,” he said. “You’re not creating a new team out of thin air, you’re moving a team that currently generates a lot of revenue in New Jersey and moving it to New York.”

New Jersey fans, he added, and New Yorkers who spend their dollars at the Continental Airlines Arena will now travel and spend their money in Brooklyn, generating more tax revenue for the state and city.

Asked what evidence he had to show that large numbers of New Jerseyans were likely to follow the team that deserted them across the river or, for that matter, how many New Yorkers currently schlep to Jersey when the Knicks play in midtown Manhattan, Zimbalist said vaguely that he was working with “various numbers” and would have to “make an estimate as to what share [of New Jersey fans] would go to Brooklyn.”

Further asked how tax revenues could be factored in given that most of the tax revenue generated by the arena will go to pay for its construction as well as the construction of surrounding office and residential towers, Zimbalist said simply, “Some of that money will come back to finance the project but not all of it.”

Zimbalist also said the housing portion of the plan — some 4,500 units are projected — would attract many more people to live in New York.

Neil DeMause, author of “Field of Schemes: How the Great Stadium Swindle Turns Public Money Into Private Profit,” has his doubts about Zimbalist’s Nets arena economic forecast.

“Do you really think that anybody form Jersey will go to games in Brooklyn?” asked DeMause, who lives in Flatbush.

“He is assuming that half the people who currently attend Nets games would be coming to Brooklyn,” said DeMause, who has discussed the study with Zimbalist, and believes there are, and will be, far fewer interstate fans than Zimbalist is assuming.

Zimbalist told The Papers he was still calculating the numbers and couldn’t release a specific figure.
While DeMause said it was a bit “offbeat” for Zimbalist to work on a project like this, he is eager to see the final results.

After seeing Zimbalist’s name splashed across magazine and newspaper articles about the plan, Ratner invited him to tour the proposed arena site in Prospect Heights and offered to hire him as a consultant.

“Mr. Zimbalist is one of the most respected experts on the economics of arenas and to have his input and support is extremely helpful,” said Ratner spokesman Barry Baum.

Zimbalist is expected to deliver his study to Ratner by mid-March.

— with Neil Sloane

Updated 4:00 pm, November 10, 2010
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