The Ballpark and Economic Development

allnotgoog-kippOne of the loudest arguments levied by the ballpark proponents was that the ballpark was going to be an economic engine for El Paso. Many of us have continually argued that economic development in El Paso is stagnant because there is no new money coming into the city. What the progressives continually ignore is that there is only a finite amount of disposable income in the city. Economic development projects continually focus on shifting the limited disposable income from one location to another.

We are labeled shortsighted, crazies or idiots when we point out this inconvenient fact each time the latest and greatest economic engine for the renaissance of the city is floated by the politicians. The problem is not that many of us do not want economic development for the city – it is that we want economic development projects to create new sources of money.

The problem with the ballpark, as an economic engine, is that it is not creating new money; instead, it is shifting the existing money from taxpaying businesses into the ballpark. This is not economic development. It is taking from one pot and putting it into another. That is what the politico majority driving the ballpark fiasco do not understand.

Of course, some of my readers reading this also do not seem to grasp this simple concept. So let me enlighten those who still don’t get it.

On August 31, David Crowder wrote in the El Paso Inc. a piece titled “East El Paso: Where the action is”. In it Crowder quoted John Geske as stating that he “didn’t want to sound like a hater, but the ballpark wasn’t good for the Union Plaza”. You remember the Union Plaza, right. With much fanfare, it was supposed to reenergize downtown redevelopment. Geske, according to Crowder, stated that his restaurant has found itself competing with the ballpark’s concessions.

Clearly, here is a long-time successful restaurateur making the argument for me; that the ballpark did not create new disposable income, instead, it shifted it away from a taxpaying restaurant towards a tax-subsidized ballpark. It took the existing money and shifted it to the ballpark that the taxpayers own. How that creates, an economic boom is beyond me.

Geske concluded by telling Crowder that he is done doing new things in El Paso and instead is looking to go out of town. Hmm, that sounds like something I did three years ago.

On Wednesday, the news media and social media was abuzz about tomorrow’s closing of Kipps Cheesesteak. You remember Kupper Gray, owner of Kipps Cheesesteaks? He was being interviewed in May 2013 by the news media because he was telling everyone that would listen to him how excited he was the ballpark was coming to downtown. He told KDBC on May 30, 2013 “more people will be heading to the downtown area and can only have a positive affect on his” restaurant.

Business owners like Kipp ignore basic economic realities and buy into the notion that if you build it they will come. The problem is not downtown El Paso is economically depressed. The notion that giving people a reason to go downtown will somehow increase the city’s viability is idiocy at its best. The actual economic problem for El Paso is that there is limited disposable income to go around. Building some new fandangle does not create new money it just shifts it from an existing location to the new one.

The only way to resolve the economic stagnation of El Paso is to incentivize new money into the city. What the city leaders have instead done is take the existing money and funnel it into something new resulting in businesses closing down because they have become unsustainable.

What is even worse, in the case of the ballpark, is that businesses that are shutting down were taxpaying businesses paying into the city’s coffers. Now, that money, that was previously productive for the city, is now being funneled into the ballpark, an economic drain on the taxpayers of the community. It just cannot get any clearer than that. However, there are still some you that will argue the ballpark is the economic catalyst the city so desperately needs.

How anyone can continue to argue that even with the overwhelming evidence is beyond me, but their doing so explains why El Paso is led by those who have no understanding of basic economics. As a result, El Paso remains economically stagnated and getting worse every day.

32 thoughts on “The Ballpark and Economic Development

  1. One restaurant shuts down and the whole thing is a wash? The statistics relating to restaurant success were working against Kipp the entire time. I have taken the time to explain to you economics.

    {Link removed by Martin on 03oct14 @ 11:29ET}

    Your rant here is basically an indictment of capitalism. Have you become a communist? There a finite amount of money that we’re all battling for – someone has to fail.

    1. A tax-subsidized vampire squid in the heart of DTEP is not capitalism. If it were, then Hunt and Foster would have paid for it.

    2. David, you did not read for comprehension. I missed the other example I shared. In the case of Kipp, his entire business model used money that wasn’t his to begin with and he assumed that if “you build it they will come”. Just like the ballpark. My point is that businesses shouldn’t have to compete with tax-subsidized businesses. That is not capitalism – it is communism. A government subsidized business always has advantage over one that is not.

      Thanks for reading my blog,
      Martín

      1. Martin,

        you assume Kipp closed because of the ballpark. He did not close because of the ballpark. So your argument is invalid.

        start with the facts and go one from there.

  2. El Paso’s current “boom” is debt-driven, not driven by new money created from enterprise. It’s like a sugar high as long as the taxpayer can float the bonds. DK can’t see that because his family lives off the taxpayer.

  3. you are devoid of any brains rotten. so are you saying that the family who owns Basiq IDIQ, CF Jordan and all the other firms in el paso are living off the taxpayer dime? they are firms who build what the taxpayer votes for or what Austin deems worthy as necessary in el paso. you are a dolt. get back to school. the Karlsruher family runs a business, they bid on jobs, they get some, they dont get some. i bet his family business could have finished san jacinto plaza refurb by now. not a thing has been done there in 8 months. i thought you lived there rotten.

    1. Peppers hangs around with the DTEP street bums and tips them to pee on Anson’s doorstep. The whole construction industry here is a parasite that couldn’t bid on any job they didn’t have to pay a bribe for.

  4. Ah jijos, hora si se salieron…..

    In a few sentences an economic paradigm has been brought into the El Paso equation. While non of the postulates is absolutely true, neither of them is false.

    The participants should agree to disagree.

    There are both economic and strategic issues with the Ballpark that will never be properly resolved, e.g. location, no parking, cost, cost overruns, improper size of land, close door deals, deals and more deals; the fact that it could have been built at Asarco, or Azcarate; that we had not destroyed our City Building; or that we had not ruined the functionability and livelihood of the surrounding inhabitants. However this conversation shall be limited to economics.

    The money supply in El Paso is limited, so is the size of the Universe. However, the money supply for El Pasoans, and therefore that of El Paso, is flexible. It can increase, or it can decrease.

    When we borrow money, we have a rush of happiness created by an immediate satisfaction, or the joy of an expectation of future goods; like having a good drink of fine Scotch. However, as with the alcohol, soon we will have a hangover, or notes to be paid.

    The question at hand should be if the overall economic impact of the park is positive or negative. On the positive, there is a lot of propaganda, on the negative, we must live with the fact that that our City, and County, needs to collect more taxes. This is the cost of living or setting up a business in El Paso. Every project like this increases the cost of doing business here, and makes the City less competitive; therefore businesses look somewhere else.

    Now, there are two types of businesses, those that bring money into the community, and those that take it out (there are also some that do neither).

    Consider a national store, yes they hire local people, but they receive money from El Paso and deposit it in a Major (out of town) Bank. The net effect is that they vacuum the money supply out of El Paso, yes, like a vacuum cleaner. Then there are those that sell products and services to other locations, or even other countries, and deposit their money here, in local banks. The later increases the El Paso money supply, flexing the “finite supply” into a larger finite supply.

    An example may be the Farah factory complex. Independent of the reasons, Farah used to sell all over the World, we had thousands of direct and indirect jobs from it. Now is a shopping center, full of National Stores, that every day they deposit their money in non-local financial institutions.

    A better example is a family.. Imagine a family where the parents both work and bring in a pay check. The kids do various activities to assist: deliver papers, take care of shores, sell lemonade on the street, walk neighbor’s dogs, etc. Now compare that to a family of unemployed that are living on credit cards. Soon their credit will be so bad that they become unemployable, but they decide to take a trip to Disney World with their last available credit. Something like El Paso demolishing its City Building to build a Ball Park.

    Of course there are people who benefited from the expense, but their personal benefit comes at a great pain to the community.

    And that is the Law of Economics.

  5. You need to read what Kipp said. I do not think he closed for lack of business. The place was always packed. Do not take his personal misfortune and twist it around, please.

  6. If we are only moving money from one pot to another, why has every previous incarnation of shopping mall not closed when a new center opened? Why are there constantly packed restaurants all over town – wouldn’t old ones fail because new ones opened? Restaurants and nightclubs are fool’s errands. They are hard to operate, and fail not because of lack of business, but because of high overhead, one of the reasons Kipper cited for his closing. You hate the ballpark. We get it. I’m just waiting for your stunning expose of how the ballpark caused the current TB problem at Providence, and the Ebola patient making it to Dallas.

  7. Tirilon, I like your posts. You understand many complexities that others who post fail to understand. One small sticking point though. Out of town companies don’t just siphon money away from a community, they also add to it by way of taxes, wages etc. Many Juarenses, for example, will come shop in El Paso because of the national chains we offer. This brings money into our local economy.

    Patricia, et al. Kipp did not close because his business was “always packed”. If he were raking in money as he thought he would he would have opened that second location he promised would come as the result of the ballpark’s success. That makes his understanding of business and (behavioral) economics bit of a failure and that’s why he closed.

    Kipper and Stephen Poessiger almost wet themselves with excitement when making the case for the ballpark. Now they look like putzes.

    Recently, a local restaurant owner looking to start a brewery was dissuaded from opening downtown by some of the interested parties in Union Plaza. As one manager in the area stated, “it just hasn’t been the economic driver we thought it would be”.

  8. Vegas, you didn’t address what I said. If we are just moving money from one project to another, the new project would kill the old. That hasn’t happened with any of the malls, as many predicted when the Fountains opened across from Cielo Vista.

    Restaurants and bars are dicey, at best. Why would Kipper lie about why his business is closing? If it was indeed because of the ballpark, why wouldn’t he just say that? Because it would make him look bad? Who cares? His business is kaput, he owes nothing to Foster or Hunt, so why not say, I got burned by the ballpark?

    As for your hilariously vague ‘I heard about a guy who knows a guy who thought about opening a business downtown’ anecdote. I heard about a guy whose family is in the business of making money who is currently spending big bucks to open a beer garden a few feet from the ballpark because they’ve done business plans and market analyses and know that there is high probability that they will be a successful business in the shadow of the ballpark. His name is TJ Karam.

    I find it hard to believe anything someone says who hides behind a screen name and a ‘I know a guy who knows a guy’ scary stories. Either have the courage of your convictions, or yell upstairs for your mom to make you some more snacks while the adults talk.

  9. I tend to agree that there is only a finite amount of disposable income in El Paso. After moving back to Tulsa now for a few months and thinking of El Paso, its so clear. When I went to downtown El Paso last summer the longest line near Kipps was at the banks cashing SSA and welfare checks each 3rd day of month and 2nd Wednesday.

    I went to the SW Ballpark once and was shocked how much the Hotdogs cost.

    Ive read also about the new Trolley cost too.

    Ive always thought a more even fair thing for El Pasoans would not be Ballparks and $9 Hotdogs but a living wage $10.10 or more like 12 states have….and if that is true Communism so be it, as at least its not China type Capaitalism. Now more states and cities are are enacting living wage laws and they can’t all be socialists.

    Rather than a Trolley Ive also suggested all that need be done is close the streets at the Golden Horseshoe Ciro shops and make it open walkway like Juarez did….cost? a few hundred dollars not Millions like Trolley and Ballpark.

    See El Paso for what we {I should say what you are} are, poor workers etc and help them people….give the Golden Horseshoe shoppers drinking foundations and toilets before corporate welfare etc and discrimatory sectional tax break zones.

  10. The purveyors of these policies studied things like poetry, creative writing, prose Their useful idiots are failed junior college ball players and in their dreams media gurus who could do no better than be a white guy with a media degree from UTEP subsidized by mom and pps (ie, the El Paso tacpayer) and o bubblegum music station DJ in El Paso, TX who thinks her mutt pedigree is superior and more exotic than the other mutts . Do you honestly expect them to understand a balance sheet or income statement or much less a municipal budget! (Much less basic economic principles). I’m not saying they’re not smart, but they are poorly informed or intentionally intellectually dishonest. one thing they’re good at– and quite trained at– is their eloquent spin, even when it’s nonsensical gibberish. that a very Mexican matron like Veronica Escobar can speak like the best well-spoken Westside white lady impresses people. But like a Cantinflas using impressive phrases, she says nada. Same with her Dixie Ivy League attendee white sister, Susie. So really, their followers are not useful idiots. They’re idiots.

    1. It is amazing how the elected officials make decisions here. They take the spin from Mountainstar or Valencia and turn it into massive debt, call critics “crazies and then blame the crazies when their projects don’t make the (fake) promised numbers. Every year going forward now, the ballpark will cost the city more money as the HOT cannot cover the bond payments. But the spinmeisters and Ecstactic Ones will never step up and say, “We fucked up.”

  11. Never heard of this restaurant, not a great loss, one business closes others will open up in that location. Downtown is far from being complete over 700 million is earmarked for downtown, problem here in EP is people want a microwave done in 30 seconds results type of mentality, it will take time.

  12. I didn’t say Kipps failed because of the ballpark. It didn’t accomplish what he said it would do. He said the ballpark would help him open a second location. We can all agree that this didn’t happen.

    As for the question as to why he might not be honest about the ballpark? He came out so strongly as an advocate of the ballpark that I don’t think he can be honest without looking like a chump. He’s so delusional that the Kipp’s Facebook profile is of this putz and a child in front of the damn ballpark! Let it go man!!!

  13. He DID open a second location – ON THE EAST SIDE! He closed it. This has nothing to do with anything other than personal issues. Stop making something where there is nothing.

    1. He lost his wife’s inheritance on the two restaurants. He also told everyone that the ballpark would make him rich and it didn’t.

      1. And you know this for a fact? How? I doubt this is true. Marital problems? Could be. None of our business. Move on.

      2. I know more than you think. The divorce decree was signed on June 24, 2014. It was filed by Katherine. By his own admission he closed the restaurant because of lack of business and personal problems. Katherine filed divorce papers when he closed the second restaurant. He used her money to fund his dream.

      3. There you go. The divorce decree was signed in June. Divorce means separation of property, meaning financial difficulties for most. You just proved my point. If what you say is true, I am sorry for both him and his ex-wife. Divorce is never easy.

      4. Well Observer, you may know more than people think, but you are trying to manipulate that facts.

        You conveniently forgot to mention that the petition for divorce was filed on May, 23 2013. Just after construction on the ballpark started. On the same day, Kupper was served with restraining order on behalf of his now ex-wife.

        So tell us again, how did the ballpark lead to his restaurant closing? Personally, I suspect that a messy divorce probably did a LOT more to contribute to the business failures. Plus, as others have noted, he might have needed to liquidate his assets as part of the divorce decree which you pointed out was just finalized a few months back.

        Yeah, clearly that was all the ballparks fault.

        Mentiroso.

  14. Excellent observation Patricia. The fact that a shopping center does not close should not be construed as a success. SC are evaluated in their sales per square foot. In El Paso the Simon properties have two, one that ranks on top and another on the bottom. While Cielo Vista is, or used to be, the top performer, Sunland Park has been in the bottom. However, SP is “subsidized” by Simon properties, either the rents are below par or some sort of gimmick has to be achieved. Just remember all the stores that have come and gone in Sunland Park, e.g. The Popular. I’m sure that Simon would sell Sunland Park in a heart beat. Also you may remember Morning Side Mall, the one on the North East, the other on Lee Trevino and I 10. Interesting to consider is that the spaces left vacant by B&N and Best Buy were not, or have not, been filled. This may be a good example of shuffling open to purchase budget.

    Mouse, you have to look at the poser behind the throne, not the Crown.

    Running a business is hard, in El Paso is very hard, I for one am sympathetic to all business owners. Of special concern to me are the local business talent that do not have the clout to face the local bureaucracy and then, the State and the Federales. Ironically we have been bashing for over a decade our best customers, those from Mexico. The way we treat them at our front door (US port of entry, US Consulates) is shameful. What Mexican in his right mind would come here to buy or visit? And which American will expect them to come and buy our Chinese goods? Besides, now they can buy everything there, even less expensive. And then, our Soldiers also have a most beautiful Tax Free shopping facility.

  15. Lorraine, that makes two failed restaurants! You keep missing the point. He claimed he would become a success as a result of the ballpark. What do you fail to see? That CLEARLY did not happen. I walked by his restaurant on a game day–there were two people eating there! It was a virtual ghost town.

  16. No, Vegas, YOU are missing the point. Restaurants fail for various reasons and they are not always financial. READ his statement and stop putting your own twist to eat. Thank you and have a nice day.

  17. Lorraine, if I have trouble outside of my business, personal or otherwise, a windfall from a baseball stadium or from anything else (if that were the case, which it was not [a windfall]) would keep me vested in my business. In fact, in a case like a divorce, it would behoove me to keep a successful enterprise open. It could pay my legal bills! However, financial troubles are often cited as one of the most common causes of a divorce.

    In Lorraine’s mind, two closed restaurants are not equivalent to failure. At the very least, they do not qualify as “non-success”.

    There is no hope for those who love the taste of Kool-aid…(see Kipp’s Cheesesteak dedication page to the Chihuahuas on the Kipp’s Facebook page). They will go down with the ship.

  18. …And for the record, I don’t wish for anyone to fail. I would love for Kupper to have his family and wealth intact.

    When you advocate as strongly as he did for the stadium (and ask for the city to obligate others financially for the sake of a priveleged few), you better be prepared to be a target for criticism. You also better be prepared to produce the results you claim to be able to accomplish.

  19. Truth be told, that stadium did not bring the expected windfall. It just didn’t. Too bad. John Geske is a restaurant genius.

  20. So Martin, please tell us how Kupper’s divorce played into the problems he had with his business? I mean, if the ballpark contributed to the business failure, then clearly a troubled home life would have contributed at least as much. Wouldn’t it?

    I mean you go on and on about how terrible the ballpark is and you talk about his acumen as a businessman but you never once mention a major factor that would pretty much have to play a role since Texas is a community property state and he would have to split assets with his ex-wife.

    Rather than being a bad businessman or being hurt by the ballpark it seems like Kupper might have just been an unlucky guy who went through a divorce and wasn’t able to get out with his business intact. Somehow that seems more plausible and since he did allude to personal problems in the same statement as the economic difficulties, I would imagine that the personal problems probably played at least as important a role in his decision to close his business.

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