Allentown's proposed downtown hockey arena could deliver potent medicine to help heal the city's ailing economy, but it would likely come at the expense of other regional attractions.
If the arena draws a half-million visitors a year to downtown Allentown, it could inject more than $39 million in new spending into the city, according a city-financed economic impact study.
Phantoms jerseys purchased at the arena, and dinners at nearby restaurants before and after events, said Brian Connolly, project director for Convention Sports & Leisure, an advisory firm hired by the city to study the arena project.
"It's all of the dollars that are spent in the arena, or in the economy, due to the presence of the arena," said Connolly, whose figures will be featured at three arena project open houses.
The city hopes to complete the $100 million, 8,500-seat arena at Seventh and Hamilton streets in time for the start of the Flyers' affiliate's 2013 American Hockey League season.
The arena's ability to boost the city's economy has been one of its prime selling points, and CSL's report suggests it would provide a healthy dose of dollars.
"We have done a number of different studies dating back to the late 1980s for downtown revitalization," said Mayor Ed Pawlowski, in presenting the findings earlier this month. "All of them talked about downtown having a key access point like the arena."
Using a narrower measure, Reading's Sovereign Center and Sovereign Performing Arts Center reported that they directly contributed about $5.6 million to that city's economy in the 2010-2011 season, which drew 516,000 visitors. That doesn't include $2.2 to $2.6 million a year in food and beverage sales.
The Sovereign estimate counts employee salaries, parking fees, payments to nonprofits whose volunteers sometimes work concessions as a fundraising mechanism, amusement tax, and purchases from local businesses. Total wages and benefits paid to all employees added up to $3 million.
A $39 million bump would be great for Allentown, but economic experts say much of that new spending will be money that would have been forked over elsewhere in the Lehigh Valley, say, for a movie at the Rave theaters in Center Valley or dinner at Starfish Brasserie in Bethlehem.
"Where they talk about it being economic development, it really is redistribution unless you focus only on this narrow, small area of Allentown," said Dennis Coates, an economics professor at the University of Maryland Baltimore County who has studied sports venues.
All the numbers should be viewed skeptically, he said. "It is basically a public relations document as opposed to an economic analysis."
Research has shown arenas don't dramatically increase the total income available for entertainment spending in a region unless they draw heavily from outside the area, said William Beyers, a University of Washington geography professor who has studied the issue.
That usually requires an attraction that can entice visitors to travel long distances, such as a world-renowned art collection.
"What this is doing is altering how I spend the income I am earning. If all of a sudden I decide to go to the game and spend $25 on a ticket, that is $25 I don't spend on something else," he said.
Beyers' and Coates conclusions would be valid if the "region" is defined to include everything within 50 miles of Allentown or if there were a similar arena somewhere in the Lehigh Valley, said Mike Stershic, president of Discover Lehigh Valley, the regional tourism promotion agency.
"But if you draw that circle down, if you look at it within the two-county border only, I think it will be a gain," he said. "It will be new money spent locally instead of elsewhere."
Rather than reallocating entertainment dollars from venues in Bethlehem or Macungie, Stershic said he thinks most of the new spending related to hockey games and concerts in Allentown will represent money not being spent on events in places like Reading and Hershey.
SMG, the operator of Reading's Sovereign Center arena, is preparing for the addition of one more competitor to an already over-saturated arena market, said Zane Collings, regional general manager. Reading is competing now for shows with arenas in Hershey, Wilkes-Barre and Trenton, N.J., and in some cases, Philadelphia. The arena reported a $197,000 loss in 2011.