Natural Science Center Bond Numbers Don’t Add Up

The NSC is a great place to visit and seems to be very well managed, but the numbers they are touting to push passage of the $20 million dollar bond just don’t add up.

1) In his letter this week to the Rhino Times (print edition only it appears), Gary Brown, Chairman of the NSC Board of Trustees, writes “This facility will provide a truly affordable and family-oriented science education and tourism destination”.  In his economic impact study, presumably at the direction of the NSC, Dr. Brod assumes no “price changes“.  This is completely unrealistic.

Doing an (admittedly non-exhaustive) search of the internet, I found 7 aquariums (aquaria?), averaged their ticket prices and came up with $25.75 for adults.*  The current price at the NSC is $8 for adults and $7 for children 3 and up with a $1 discount for city residents.  Aquariums are very expensive to operate.   The least expensive adult admission price that I found was $16 and that was for the Seattle Aquarium which is an aquarium only, not also a zoo.  It is extremely disingenuous for the NSC to assume no increase in ticket prices!

2) The Economic Impact Study does not include any projections assuming the bond does not pass.  That makes it impossible to determine the NET impact of the $20 million bond issue.

3) The NSC website claims “250 jobs supported”.  Currently, the study claims 153 jobs are supported by the NSC (this includes “indirect” and “induced” employment).  I can not get to 250 jobs** when looking at the numbers in the economic impact study, although clearly some of the jobs created in the interim periods (up to 2018) would be for construction and would be temporary.  Nevertheless, assuming the net impact will be 100 new jobs, that works out to $200,000 of tax payer money per job created.

*Feel free to ask me for the list!

** I come up with 414.4 if I total everything up as listed in the Economic Impact Analysis that is presented on the website, starting with 153 or 369.5 starting at 0 (but that is nonsensical).  So probably Dr. Brod is taking the construction jobs back out to get at 253.

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13 responses to this post.

  1. Posted by David Bartone on October 30, 2009 at 1:39 pm

    MJsunshine: It is first important to point out that John Hammer and the Rhino “wholeheartedly” endorsed the Science Center bond. He is hardly a liberal. You could learn a lot from him. You neglected to mention his incredible endorsement and instead chose to dwell on what you perceive as negatives, though your fact-finding is clearly superficial. The new SciQuarium project is a hybrid museum and aquarium, a prototype if you will. It consists of about half interactive water-based exhibitry and half living aquatic collections. Their plan was reviewed by aquarium professionals over a 3 year period. I will trust them over you. Their business model calls for $2 cost increase per visitor after everything is constructed. However, that cost will not be added to Greensboro citizen admissions. You use terms like “unrealistic” yet you truly have no clue of what you are talking about. Seriously. Facts matter and you are just speculating on something that you are angry about instead of giving a proactive and cost efficient organization with an impeccable 20 year track-record the benefit of the doubt. Mr. Hammer attended every single presentation done by the center and had an informed opinion when he decided to endorse it. You choose the uniformed method based on researching the internet. Lastly, the jobs number is based on direct and indirect employment. Since you say you are an informed person, I won’t explain what that means because it is clearly described in Dr. Brod’s study. To all of the readers of this blog, please look to Mr. Hammer’s informed assessment of the Natural Science Center bond.

    Reply

    • Posted by mjsunshine on October 30, 2009 at 2:49 pm

      John Hammer’s endorsement has nothing to do with the points I have made & is completely irrelevant to this discussion.
      Have you read my other post: Natural Science Center $20 Million Bond Economic Impact Study? I do not want to repeat myself here.
      I am not “an aquarium professional”, but I AM an economist, and so feel pretty confident in the questions I am asking in regard to the economic aspect of things.
      Dr. Brod explicitly stated that he was assuming no cost increase, and there is no mention of one on the NSC website, so that is what the public has been told and I continue to believe that is not realistic. “Hybrid” or no, the new aquarium facilities are going to require more funds to maintain and those monies will have to come from somewhere. I cannot believe they will come exclusively from out of city visitors. As far as researching ticket prices of other aquariums over the internet, I didn’t have time to do an exhaustive search, but did look at the costs of several and they are all substantially more expensive than the current fee here. I find it hard to believe that the NSC would be able to run things that much more cheaply than other aquariums, no matter how efficient they are.
      Additionally, I don’t think voters should give anyone “the benefit of the doubt” when it comes to spending taxpayer money. Do what you want with your money but don’t force other people to support something just because you think it is a good idea. I believe that was pretty much my entire point from the beginning.

      Reply

  2. Posted by David Bartone on October 30, 2009 at 4:00 pm

    The reason the bond has progressed to this point is because city council (9 to 0 on five separate votes) thought it was a good idea as well as every major publication in Greensboro, every economic development oversight agency, over sixty large and small businesses and the thousands who say they will go out and vote ‘yes’ next Tuesday. The center did not force this down anyone’s throats. The center proposed a signature project, proved itself as an organization (as eloquently stated by John Hammer) and built momentum based on community support and input. Second, you completely misinterpreted Dr. Brod’s study. The “no cost increase” statement is based on the market and consumer costs for operations, construction and supplies. His assumptions were based on current market and material values given that there is no credible way to assess upward or downward shifts. He did factor in general cost of living trends. Lastly, and as stated by the Rhino, the NSC has been an excellent steward of public and private dollars. They get the “benefit of the doubt” due to a 20 year, post city control track record of accountability. Or, for further convincing, perhaps you should speak with the conservative candidate for mayor who has a VOTE YES NSC sign in his yard. Smart, long-term, big picture thinkers see that the $20M initial investment will yield long-term benefits and generate local dollars, bring a new revenue stream to Greensboro and thus add to a foundation of tax revenue (generated by out-of-county visitors) that in turn gives conservative leaders the revenue on which to argue not passing permanent tax increases, hence true tourism-based economic development. I am quite sure you will “not believe” the experts, the museum’s track record or the people who have done their homework (including countless conservatives) with regard to this project. Your arrogance and “certainty” that you are right is quite stunning. Other smart conservative people have done a lot more homework than you and have drawn alternate conclusions. Perhaps you should at least give them the “benefit of the doubt.”

    Reply

    • Posted by mjsunshine on October 30, 2009 at 4:25 pm

      The only one who is being arrogant here is yourself. You have not refuted any of the points that I raised in my previous response to you nor any of the issues I raised regarding Dr. Brod’s study. You ramble on and on about the other people supporting the bond, call me names and attack me.
      I am very familiar with economic impact studies, having a husband who used to do them for a living, so your assertion that I don’t know what I am talking about is completely inaccurate.
      I didn’t say anyone was ramming anything down anyone’s throat, just that I don’ t think the numbers add up and I’ve used facts to make my points, not any personal attacks. You, however, have made personal attacks against me several times in your responses to my posts. You ramble on and on, call me names and attack me but have not really responded to the points that I have made.

      Reply

  3. Posted by David Bartone on October 30, 2009 at 4:40 pm

    I absolutely mean no disrespect but what question has not been answered with existing data or in one of my answers? (Question 3) The jobs data calculation is in the study free for everyone to read. You can believe it or not (that is fair) but it does represent a standard method in the industry. (Question 2) Dr. Brod’s analysis clearly states the Center’s current impact, thus the impact if the bond does not pass. (Question 1) The Center, I am told, is looking at a $2 increase that will not apply to GSO residents. Their business model is based on volume and per cap spending in the new cafe’, gift shops, theaters, etc. They ran the numbers through AZA and AAM experts before going public for the bond. I apologize for the arrogant comment, but there are others who have done a heck of a lot of homework and research on this before drawing conclusions. I am one of them. I apposed it at first too. But now admittedly, I am a huge fan and have gained complete respect for their team and leadership. I am please Mr. Hammer did too.

    Reply

  4. Posted by mjsunshine on October 30, 2009 at 5:30 pm

    I said I was just confused by the jobs but am happy enough to assume an additional 100. That works out to $200,000 in taxpayer money per job.
    Now, number 2 here is where it gets confusing. it is not appropriate to compare the current economic impact with the economic impact ten years from now with a big cash infusion. You need to take inflation into consideration so you really do need to do another analysis assuming no change in the capital expenditures. I would not assume flat visitation without the bond passing. My husband is much better at explaining this and the first thing that jumped out at him was that the other scenario was missing for comparison. He also wondered about the fiscal multiplier of 1.65. A fiscal multiplier of 1.65 means that if you threw the money out of a building downtown, it would generate 1.65 times that amount in fiscal stimulus. So the question is: Is that specific to the NSC or is that a generic Greensboro multiplier? If it is the local multiplier that they use for everything, then why spend the money on the NSC and not just hand it out in the street (or cut taxes by that same amount)?
    As I mentioned in my other post, any increase in the ticket price will lead to a decrease in visitation, the question is: Is that offset by the increased visitation from the new exhibits? I remain skeptical of the ticket price assumption as the money will have to come from somewhere, either from a bigger annual top-off from the city, increased membership fees or something. And of course if their estimates of higher spend in the gift shop, etc by (non local) visitors do not pan out, that money will still have to be found. I do not think that the new expansion is going to cause a lot of people to start traveling long distances to come here. Most large museums are in towns that are already popular tourist destinations. As I mentioned before, there is also the issue of limited “fun money” that people have in their budget and, to the extent local folks spend more at the NSC, they will spend less elsewhere. This is irrelevant to the NSC but an important issue that I think taxpayers need to consider.

    Reply

  5. Posted by David Bartone on October 30, 2009 at 6:24 pm

    I am off to take my daughter to her first dance, but will address your question tomorrow. I know the answers to each. I interviewed Dr.Brod. I actually recommend that you call him. It is amazing how conservatively he made his assessments, further substantiating his findings.

    Reply

    • Posted by mjsunshine on October 31, 2009 at 1:55 am

      You know, don’t bother. You have all the answers, apparently I have only stupid questions and should just leave this up to the “experts”.
      Well, I really think that’s a load of garbage but, frankly, I’m getting a headache and can’t sleep. This is stupid. I am unwilling to make myself sick over this. The points I have made and the questions I’ve asked have been valid and I am tired of arguing about it. If GSO residents want to tax themselves further, then I guess they can do that. I was just hoping people might go into this with their eyes open.

      Reply

  6. Posted by David Bartone on October 31, 2009 at 8:23 am

    Okay, and do not get sick over this. I too was angry about this project when I first heard about it. Your questions are not stupid but they do have real and valid answers. They are the same ones I asked and got answered. That is the difference. You are the one who wrote the second blog posing new questions, not me. I have spoken with Dr. Brod. I have interviewed Science Center staff. I went to one of their presentations. I asked them the hard questions. I studied their finances and even spoke to a city official. I am telling you that this organization is on the up and up and doing everything in their power to help Greensboro, taxpayers, kids, families and all the rest. That is why I am so passionate when I hear or read inaccurate and uninformed discussions that are blatantly false. John Hammer on the other hand did what I did, he went, listened, observed and made a educated assessment based on hearing all sides, not just one. That is all I am saying.

    Reply

    • Posted by mjsunshine on October 31, 2009 at 1:31 pm

      I asked those questions based on the information presented by the NSC itself. It is unreasonable to expect each and every person to go to great lengths and spend endless hours figuring this stuff out. It is up to the organization asking for taxpayer money to show why they should get it.
      Again though, whatever the merits, I think a bond for a private entity is a horrible idea, not to mention a very slippery slope. I’m sure the Children’s Museum will be next if we aren’t already paying on a bond for them…. I believe there is a VERY limited role for government in society and financing museums (especially in a bad economy) is not one of them.

      Reply

    • Hey-
      $5.64 dollars a year for a great improvement for Greensboro, making it a top 10 visitor sights in the USA? One would spend that on a pack of cigarrettes or a Starbuck coffee…..

      Reply

      • Posted by mjsunshine on November 4, 2009 at 8:58 am

        I don’t smoke, nor do I drink Starbucks, but I’m about to be a few bucks poorer every year since the bond passed. Incidentally, the $20 million is supposed to make the NSC a top 10 attraction within NC, not the entire US.

  7. Posted by David Bartone on October 31, 2009 at 3:02 pm

    I think your argument is fair. With many bonds, I would agree. I do believe that the Science Center has outlined a very thorough plan and has made great arguments which is why so many people from both parties support the project. Like some are doing, I think it is unfair to compare a greenway, a non-revenue generator, with a top-14 state attraction that has the potential to be a top-10 in the name of science education and wholesome family entertainment. Should government be involved, maybe not. But their non-profit agreed to take on the challenge of taking over a formerly city operated facility. You have to give them credit for trying to pull in as many private sector forces as possible after being a 100% city function for over 30 years. I do give them the benefit of the doubt and am confident that they are honorable folks who talk the talk and walk the walk.

    Reply

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