Effingham Sports Center

My old Economics professor once told us "monopolies are price setters, not price takers". The reasoning behind that statement is where there is no competition, prices are set by the monopolist, not the market. The City of Effingham is looking to establish a monopoly on sports recreation in this city, in my humble opinion. As a result of having tax payers, Hotel/Motel tax dollars, or private donors, the city will be able to drive out any competition. For example, take a look at Standard Oil from the 1920s before the company was broken up by the US government. The Standard Oil monopoly did not get broken up because of vertical integration or the size of the company, but Standard Oil was broken up because they controlled most of the resources and we're selling their oil cheaper than the competition could afford to do, thereby pushing their competitors out of the market. Sound familiar? I think it does.

Lastly, if there was such a demand for such a facility, where are the private investors jumping at the opportunity? If private investors don't see profit and have not built such a lavish facility, then what makes the Effingham City Council believe they will succeed where others see failure?

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Funding

After the purchase of the Rosebud Theatre by the City of Effingham, there is no more money left in the Hotel/Motel tax account to adequately fund all the projects proposed. Hank Stephens, Effingham's Economic Consultant, even stated as much prior to the Rosebud Theatre bailout, as quoted in the Effingham Daily News December 16, 2009,

With other projects already slated for use of hotel-motel tax funds, there is not enough remaining in the hotel-motel tax account to sustain payments over 20 years to purchase the Rosebud building, according to Economic Development Consultant Hank Stephens.

As a result, the city council (though they now deny it) has been pushing for a .5% food and beverage tax to help offset the purchase of the Rosebud, which would in turn help find the funding for the Sports Center. Needless to say, not many people are going to like the idea of their taxes being raised, directly or indirectly, to help pay for the Sports Center or Rosebud.

With these funding problems in mind, how does this effect the feasibility study done showing that in the best case scenerio, the Sports Center would be paid off in 7 years; worst case scenerio would be up to 38 years? It would be interesting to see to say the least, especially in this economic climate...

Other Arguments

Who is going to run the Sports Center? It is my understanding that Rink Management has been out of the picture for quite some time now, and how does that effect the overall cost of running the facility?

What about the local schools? How will they be able to utilize the facility? The local schools are owed plenty of money from the state and budgets are tight, so if there we're any plans to establish swim teams at the local schools (which one school board member said has not even come up at this point), how would the schools find the money to use the facility?

If the fitness center is not included in the plans, how often will the building be used? It seems that the entire project is based on getting people to use the facility at all times via the fitness center instead of just opening the doors for tournaments or meets.

Money is tight all around. How will schools or organizations justify spending the extra money to attend and stay overnight (the weak justification for using the Hotel/Motel money) or add another tournament or meet to their schedule? Ask any teenager what there is to do in Effingham and they'll tell you nothing. Don't think that coaches and athletic directors don't recognize this as well. Do you spend the money going to a meet near or in Indianapolis, Springfield, St. Louis or Chicago, or do you spend money to come to Effingham to have your players twiddling their thumbs when they are not competing?

If the private fitness center businesses close, then how much money will the city lose in tax money? Besides, Commissioner Karen Flach raised another point regarding the purchase of the Rosebud that is more than applicable to these businesses as well. She was quoted in the Effingham Daily News, November 4, 2009,

Public Property Commissioner Karen Flach was concerned about thetheaters cost to the city and what would happen to the investment if itdid not generate enough revenue to keep the doors open.

"Weregoing to be stuck with that building and property, Flach said.

Think of The Zone downtown Effingham. We would have an empty building on Jefferson Ave., downtown if they closed their doors as a result of the Sports Center. What if the Sports Center did not go over and failed to live up to expectations? Will the city bail out the Sports Center or will we "be stuck with that building and property"?

Final Thoughts

First, the Sports Center should be scrapped for the reasons I stated above, least of which is the destruction of private business that the Sports Center will compete against.

Second, if it isn't scrapped, there should be a new feasibility study conducted to take into account our city and state finances, the current national economic climate, the reduction of positive income via the Hotel/Motel tax, impact to the Effingham Park District, and area school funding.

Finally, the residents of Effingham should be allowed to vote on this project in a BINDING referendum because as Mayor Lange is quoted on the City of Effingham website from August 6, 2007,

The Sports Center is one unique project that these funds can be used for that will benefit everyone, said Stephens, adding because the funds are restricted they can only be used for certain projects.

Mayor John Lange reminding residents that this is a community project.

This project is about you, the community, said Lange. It is not an I project. It is the communitys project.

Tell me what you think. Call the Effingham City Council members. Write letters to the editor. Attend the City Council meetings with signs protesting this irresponsible government spending. Your silence is their consent!!!

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