The decision by the New York Yankees to pull its Double-A affiliation from the Trenton Thunder, a minor league team in the state capital, and move it to the Somerset Patriots, based 35 miles north in Bridgewater, reignited a long-simmering debate over the economic benefits of hosting sports venues. Municipal officials generally welcome professional teams as growth drivers, but academics who study the issue are skeptical.
The Yankees’ announcement came abruptly over the weekend of Nov. 7. Major League Baseball as a whole is reducing the number of affiliated teams from 160 to 120. In addition to the Trenton Thunder, the Yankees on Saturday said they were dropping their affiliations with the teams in Staten Island, N.Y.; Charleston, S.C.; and Pulaski, Va.
“We thank the great city of Trenton and the Thunder owners for 18 years of collaboration and we wish them well, but this decision was made strictly on the basis of what we believe to be the best facility to develop our young players,” the Yankees said in a statement on Nov. 7.
Double-A is the second-highest tier in minor league, behind just Triple-A.
Trenton officials and the owner of the Thunder warn that the move could be devastating to the local economy, which has struggled to make the same progress as Newark and Jersey City. At the same time, Bridgewater officials, and the owners of the Patriots, predict it will be a boon for the area and the already prosperous team.
Experts on the economics of sports suggest that the effects would be far more muted.
“The literature on the economic impact on stadiums, both major league and minor league teams, suggests that at best it’s a very small impact,” said Andrew Zimbalist, an economics professor at Smith College in Massachusetts. “Most of the people who attend the ballpark, particularly for minor leagues, will be people from the immediate area.”
Tourists and the dollars they’d bring from New York City and Philadelphia, are more scarce, he said.
But leaders in Somerset County, like Bridgewater Mayor Matthew Moench, think the Yankees affiliation could be just the “shot in the arm” the region needs as COVID-19 upends a long-standing economic model dependent on the nearby retail outlets and sprawling commercial real estate market.
Executives of the Patriots – the team has played in TD Bank Ballpark, a stone’s throw from Interstate 287 for the past two decades – think so too. “It’s going to bring tourism,” Steven Kalafer, the founding owner of the Patriots, said in an interview. “The attendance will rise significantly because of the New York Yankees affiliation, and rising attendance brings people to the community, restaurants, additional staff with the ballpark. That type of multiplier effect [will occur] because of the New York Yankees.”
Moench said that Bridgewater and much of Somerset County, long reliant on office parks and malls for revenue, have been hurt by the pandemic. Retail outlets stayed shuttered for months and can only now operate at reduced capacity. And customers have tightened their belts due to record-high unemployment.
With many companies folding or having their workers telecommute, the county’s office parks are also threatened. And the many hotels that travelers frequented for business trips to those offices also stand empty.
Moench said the township had a $2.1 million hole in its budget, because of “reductions in building permits and interest,” as well as a “big hit from decreased hotel occupancy taxes and loss of revenue from profit sharing with the Bridgewater Commons mall.”
Spending was cut by $1.6 million, which caused 14 layoffs, reduced pay raises, and other delayed expenses, according to the Bridgewater mayor, on top of emergency bonds. “Locally, we’re going to be studying this a lot closer, in terms of what the impact could be, how do we further capitalize on it, how do we partner up our local businesses, hotels and restaurants with the Somerset Patriots,” he said.
Kalafer explained that even before the Yankees’ announcement, the Patriots have been “heavily involved with our local businesses, our community businesses.
“We have several of the local banks, accounting firms, law firms, building firms, real estate brokers, all local types of businesses, restaurants, just Main Street, that have been our partners,” he said. “They’ve advertised with us.”
Trenton Mayor Reed Gusciora panned the move, characterizing the Thunder and the Arm & Hammer Park stadium on Route 29 in which the team is based both as anchor institutions. “The franchise has been an integral part of our city’s landscape for many years, and we were able to draw a loyal fan base across the region,” he said in an interview.
Much of the state-owned offices and headquarters, like the New Jersey State Capitol Building, are tax-exempt. And the city still lacks other large-scale anchors that could usher in economic development. “For an organization that has made it a point to highlight their contributions to diversity and inclusion, the Yankees struck out with this move,” Gusciora added in a Nov. 10 statement. “Gone will be the job opportunities for many of our youths and local small businesses who occupy Thunder’s concession stands.”
Joseph Plumeri, owner of the Thunder, warned that the Yankees’ “11th hour” decision “removes a key source of income for Trenton.
“By doing so, the Yankees have misled and abandoned the Thunder and the taxpayers of Mercer County, who have invested millions of dollars over the years to ensure that Arm & Hammer Park remains one of the premier ballparks in America,” he said in a Nov. 7 statement.
“While this community built the Yankees organization up and set minor league baseball attendance records, it seems the Yankees were only focused on trying to cut culturally diverse Trenton down in favor of a wealthy, higher socioeconomic area in Somerset.”
Yankees officials would not comment on the remarks by Gusciora and Plumeri, pointing instead to their Nov. 7 statement. In that statement, the team said the Thunder will be offered Somerset’s membership within the Atlantic League of Professional Baseball, a minor league with teams throughout Northeast and Mid-Atlantic.
“It’s very likely that stadium will be used” by one of the other minor leagues, Zimbalist said.
James Hughes, a professor and economist at Rutgers University, agreed with the assessment that some type of economic impact would be felt in Trenton. After all, Trenton “did not participate in the urban bounceback” seen in Newark and Jersey City, he said.
“There’s always been a lot of serious academic studies on the impact of convention centers and sports facilities on city economies,” Hughes said. “They do have, I think, generally a positive impact. … But what you would really be looking for would be a spillover effect, in that people would go to the neighboring restaurants and bars before and after the game, so they’d be spending money in the local economy,” he added. “And the way it was laid out in Trenton, I don’t know if that was happening or not.”
Geographically, the stadium and city waterfront are isolated from the rest of the city by Route 29. But even before the highway, “the waterfront was not very attractive,” Hughes said.
“It was sort of a mixed industry residential neighborhood there. You had various factories and work-housing surrounding the factories. Even without the highway, it was not utilized by a lot of people.”