By John C. Mozena
One of the fundamental rules of golf is that every player is responsible for writing down the correct numbers on their scorecard. But from what we know about the PGA Tour’s request for more than $16 million in public subsidies for its latest project, the numbers on the “economic impact” scorecard don’t appear to add up for St. Johns County taxpayers. Is the Tour playing fair with St. Augustine?
The broad strokes of the deal are that the PGA Tour will spend $100 million on a new broadcast facility and hire 45 new workers at an average annual salary of slightly less than $80,000 per employee.
This will supposedly generate $304 million in direct economic impact to the community every year.
That outcome is, to put it mildly, deeply unrealistic.
One simple way to understand how far out of bounds this prediction lands is to consider it in terms of how much economic value each of the 45 new employees must produce to meet that $304 million projection. That’s an average of roughly $6.75 million a year per employee, every year for the next three decades.
Even massive subsidy boondoggles such as Tesla’s “Gigafactory” in Nevada, Amazon’s “HQ2” in Virginia or Foxconn’s LCD factory in Wisconsin didn’t promise a million dollars per worker worth of local economic impact, much less the PGA Tour’s implied $6.75 million per new media center job.
To understand exactly how unrealistic this prediction is in the real world, consider that there are roughly 159,000 working-age residents of St. Johns County, according to the U.S. Census Bureau. If every worker in the county produced the same economic impact that the PGA is predicting for each of its 45 new broadcast center employees, St. Augustine would have a trillion-dollar economy.
This would make the local economy larger than the entire national economies of major countries like Saudi Arabia, Switzerland or Sweden.
This would be hilarious, if the stakes weren’t so serious. That’s because county officials and other local leaders are apparently relying on these projections to justify subsidizing the PGA’s projects at the expense of everyone in the community who relies on – or pays for – important public services.
If the deal is approved as currently designed, the county is reportedly expected to pay the PGA $671,150 per year for 30 years, starting in 2025. That is real money, coming right out of the county’s budget. To provide some context, that is more than the $646,943 in the county’s 2021 budget spends on new equipment for the Fire Rescue Department. That includes lifesaving breathing equipment, new saws to rescue trapped motorists, updated dispatch consoles for 911 operators, repairs to 40 fire hydrants and every other new piece of gear the county’s firefighters and EMS first responders need to save lives – all for less than the cost of the PGA’s proposed annual subsidy check.
Are the elected officials and people of St. Johns County comfortable making that kind of tradeoff? Especially if the promised payoff turns out to be as wildly optimistic as it seems? And how good a local corporate citizen is the PGA Tour if it is offering this apparently one-sided a deal to the St. Augustine community?
The rules of golf say that every player is expected to act with integrity, show consideration to others and take good care of the course on which they are playing. When it comes to economic development subsidies, it’s worth asking whether the PGA is playing by those rules in St. Augustine.
John C. Mozena is the president of the Center for Economic Accountability, a nonprofit organization that works for transparency, accountability and market-based reforms of state and local economic development programs across the United States.
(Note: This is a republish of an op-ed written in May 2021 that was tentatively scheduled for publication in a St. Augustine-area media outlet but canceled after local officials voted in favor of the subsidy before the publication date.)