Category Archives: East Grace Street

Bike Races in RVA: Residents Disrupted; Taxpayers Shafted!

I am back from a short hiatus with the blog – sometimes it is other things and sometimes it is bloggers’ block (what to write about) and sometimes it is pure laziness.

So about the elections:  Three of my four Commonwealth Attorneys in western Virginia were elected and so was the Tesla of court clerks (only Flux Neo lost) and you know how close to losing the state senate we came (better invite free of charge to the Advance or better yet – split ’em up between committee chairs –  Thanksgiving dinner for those four candidates for Powhatan Sheriff!) and we lost a seat in the House.  King William County will have better government as insurgents won and will assist tax cutting Democrats Stephen Greenwood in his work.

And there is a by-election in the UK and UKIP better win it unexpectedly or the people of Britain may have to endure the EU misrule for 25 more years.  I’ll be covering it a bit.

But one thing I should do is put more stuff on the record and one of them – I told several people around town but not here at the blog – was:  You know what’ll happen with the bike races?  The locals will be disrupted, not that many people will come and the taxpayers will get screwed.  Again.  (Think proposed stadium deal, Fine Arts Museum and Redskins training camp among other things…)

GUESS WHAT?!  I was right on every point.  Here’s a great article on this in the Times-Dispatch:

September’s bike races not a ‘financial home run’ for Richmond

Not a home run?  Not even sure it’s a bunt single in the infield.  Let’s start with this:

Early economic indicators show Richmond saw a small uptick in overall economic activity during September, when the city hosted the UCI Road World Championships, but a decrease in hotel occupancy and flat restaurant sales.

Or this:

The region as a whole appears to have fared better. Henrico, the only other locality in the region to assess a meals tax, saw receipts increase during September.

And the Richmond-Petersburg hotel market as a whole saw a 1.2 percent increase in hotel occupancy during the month, with the biggest gains in Chesterfield and Hanover counties.

But Henrico’s meals tax revenue (and that increase may or may not be due to the race) only increased about $75k!

Henrico posted a year-over-year increase in restaurant sales, with a roughly $74,000 increase in tax receipts.

But the county paid $300,000 to get a piece of the racing action!  (This is from this article in Richmong magazine from 2014)

Henrico is prepared to spend up to $1.4 million on the event, including a $300,000 cash contribution to Richmond 2015. Up to $1.1 million will go to infrastructure projects and overtime costs for police working the event, says County Manager John Vithoulkas. “If revenue forecasts are remotely close, many of those costs will likely be recouped,” he says.

OOPS!  The first corollary to Sandy’s First Law of Private-Public Partnerships (That the taxpayers always get screwed unless someone keeps them in mind and puts them first) is that the vivid projections given to wide-eyed public officials are never realized.  If I were a Henrico supervisor, I’d have the county manager in a hot seat at the next meeting.  But it won’t happen because they are complicit in the deal and cannot attack the manager without attacking themselves.  Need proof:  Check this out from 2012 – Henrico initially said no and they were asked to pony up MORE and then did so indirectly:

The Board of Supervisors informally accepted a recommendation by County Manager Virgil R. Hazelett on Tuesday to provide $300,000 in cash support of the UCI Road World Championships instead of the $1.4 million requested by Richmond 2015, the nonprofit group planning the nine-day event.

The county would make up the difference with indirect donations through its share of regional contributions, as well as in-kind support services such as traffic control and security for cycling time trials held in Henrico and, if requested, helping neighboring Richmond.

The decision represents a reversal of Henrico’s position last month, when Hazelett and members of the board said they would not consider participating in the cycling championships without much more information to justify the cost to the county and disruption for residents, businesses, and churches.  (I bolded this)

And here we unveil Sandy’s second corollary to his First Law:  The Tip of the Iceberg corollary:  The announced taxpayer monies spent is the tip of the iceberg!

How about Hanover?  Here are the numbers according to the aforesaid Richmond magazine article:

Hanover will pay $100,000 to Richmond 2015 next year and provide services up to $65,000 for administrative costs and public safety assistance, according to county spokesman Tom Harris.

Hanover does not have a meals tax and the recoupment is bound to be smaller than Henrico.  Here is a confirmation from the Ashland Herald-Progress and the attitude so many took about this whole thing/boondoggle/disaster:

If so, it may be difficult to place a price tag on the economic benefits that accrued and weigh them against the costs to the counties involved. In addition to the cost of Hanover’s sponsorship ($100,000) and  the enhanced video promotions that aired world-wide during race broadcasts (about $7,000), there was the extra cost to public works and emergency services to close roads and maintain order during the event.

On the other hand, many millions of people around the world were at least presented the opportunity to realize that there is a Hanover County, Virginia. Hopefully most of those who attended the event and went back home overseas will spread the word that the event was a success and that Central Virginia is a pretty nice place to visit.

Besides, how many counties can claim that they co-hosted a world-class sporting event?

Let’s hope no one in RVA has a crazy idea to bring the Olympics here to Virginia!  One hundred grand might not sound like a lot but assuming Hanover had say a thousand teachers, that $100,000 could have been an extra hundred bucks for school supplies…

And then – let’s add insult to injury:  Nobody came!  (Remember that corollary to the Sanders’ First Law?)

Mike Watkins, president of the Richmond Region Hospitality Association, disagreed.

“I don’t think the rates were a factor at all,” he said. “Were there one or two hotels that maybe had some tall rates? Initially, yes. But I think the people that were coming for the races were coming for the races.”

He said the races simply did not deliver the number of visitors organizers initially anticipated. But, he quickly added, that’s not to say it wasn’t a good event that netted the region good international exposure.  (I bolded this, too)

So what happened?  How many small businesses downtown got hurt like this guy in the R T-D article:

Johnny Giavos, who has eight restaurants in the area, said the race hurt his business in heart of the city and helped his business outside the race area.

Perly’s on East Grace Street downtown, he said, would have gone out of business as a result of the event if it were a standalone business without revenue from other properties to fall back on.

“I loved the bike race,” Giavos said. “I thought it was good for Richmond.”

He continued: “Did it hurt businesses in Richmond? Yes. Did it help businesses outside of Richmond? Yes.”

Hey, I love the bike race, too.  Civic pride and all that.  And I’ll love it better when it is somewhere else!  The local people here got disrupted:

Some downtown businesses did not ask their employers to come into work during the races, and VCU canceled classes, essentially giving students the week off.

That sure hurt local businesses and restaurants.

There is one (partial) hero in all this:  Chesterfield County.  They largely resisted the siren song of glamour and fame and rosy projections and said NO to taxpayer involvement in the bike race:

Then there’s Chesterfield, which is reluctant to use taxpayer dollars to cover the $200,000 fee Richmond 2015 requires to start a race in the county. “At this point, we’ve not been able to come to an agreement that satisfies all parties,” says David Pritchard, special project manager in county administration.

The county is prepared to spend $30,000 on public safety costs if a race did start in Chesterfield, and it is still in communication with Richmond 2015 about getting involved, Pritchard says.

Although they did indirectly contribute:

Additionally, Chesterfield waived its portion of the Greater Richmond Convention Center fees that Richmond 2015 will pay to rent the facility for two weeks next September. That amounts to $71,500, Pritchard says.

For the record, here’s the city’s and state’s contribution (most of which if not all was your tax dollars at work) was:

Locally, the city is spending $1.6 million to resurface more than 26 miles of roads in 2014 and 2015; another $880,000 will go toward sidewalk, curb, gutter and wheelchair ramp improvements along the courses, according to the city’s Public Works spokeswoman Sharon North. The city has committed $5.5 million in cash and in-kind services to the event, by far the most of any locality involved. The state has pledged $2 million.

For the record, the road improvements were largely needed.  You could say the city moved up public works projects from future fiscal years to this one.  That is not ideal but perhaps helpful in long run.  And you cannot do an event like this without police and other support.  BUT, you can see the road work was not even half of the $5.5 million spent.

And you wonder why nobody wants the Olympic Games!

So let’s sum up:

  • Bike race did not meet projections
  • Nobody came!
  • Locals and businesses got disrupted
  • Taxpayers got screwed

Another brilliant example of Sandy’s First Law of Public-Private Partnerships:  The Taxpayer Gets Screwed

Will the lesson be learned?  Probably not since Sandy has no interest in running for supervisor.  (Delegate or state senator maybe but never supervisor!)  But they tend to offer these sporting events again to the areas that hosted it before.  And my answer would be and is: HELL NO!

Article written by: Elwood "Sandy" Sanders