Chiefs Stadium Deal Is Insane

stl.pony said:

Feel like it’s largely being paid for by sales tax the new stadium development will generate.

Not in finance, so someone should absolutely check my math/analysis on this.

State of Kansas has an 8.25% sales tax. For the sales tax to generate 3 billion, the total sales would need to be about 36 billion. According to this article the Royals stadium and Arrowhead stadium collectively generate 55 million a year in tax revenue. (Don’t know what the analysis is to produce that; admit it could be wrong.) If you round it up to 60 million a year, the break even point is 600+ years.

If you take the numbers the Chiefs put out, 1 billion in economic impact for the region and 29 million in tax revenue per year. The break even point from tax revenue would be 1800 years?

I don’t know what is considered the region for the economic impact evaluation and how that changes based on if the stadium is on the Missouri side or the Kansas side of Kansas City. I also remember reading a report about the state fair of Texas that claimed that events like the state fair and sporting events don’t necessarily generate additional economic activity in a region, it just concentrates it into the event rather the wider community. (Admittedly, that could mean more tax revenue for one city in the region over another.) In my layperson’s opinion, a sports stadium deal like this doesn’t seem to be as smart of a decision as offering economic incentives to a Toyota or other non-entertainment business to move to your city.