Economic Impact: A Look Behind the Curtain

Jamie Sabbach, President & Principal, 110% Inc.

January 2026

When Popular Projects Create Quiet Liabilities

This article is part of an examination of how economic impact narratives shape public investment decisions and what they often leave unsaid. 

Image Credit: Youth Sports Business Report

I’ve worked with communities across the country that proudly point to major recreation, sports tourism, and destination projects as evidence of progress. The headlines can be quite compelling: “$15 million in annual economic impact.” 

Impressive numbers. Excitement builds. Momentum begins. 

But economic impact is not a proxy for financial sustainability. And when we treat it as if it were, we create obligations that quietly compound over time. 

Economic impact studies measure spending activity—hotel rooms, restaurant meals, gas fill ups, and retail purchases. They tell us that people are coming to the community and spending money. 

What they don’t tell us is how much of that spending actually accrues to the public organization that owns, operates, and maintains the facilities built in the name of economic development. 

Typically, only a small share of total visitor spending returns to local government through sales taxes, lodging taxes, and user fees—often 5 to 15 percent. 

So, when a project is promised to generate millions in economic impact, the more relevant and far less exciting question is this: 

How much of that revenue actually shows up in the local government budget?

Costs Rarely Lead the Headline

At the same time, the full cost of operating and sustaining large public facilities is rarely discussed with equal clarity. These facilities require: 

• Staffing 

• Utilities, including power and water 

• Ongoing maintenance 

• Long-term capital replacement—turf or flooring, HVAC systems, lighting, roofs, parking, and supporting infrastructure 

Many organizations budget for annual operations while underfunding or dismissing long-term capital needs. The facility appears affordable until replacement cycles arrive. 

When realistic revenues are compared with realistic costs, a familiar gap emerges: expenditures outpace revenues, creating a recurring subsidy on the backs of all taxpayers. 

A subsidy, by itself, is not a failure. The failure occurs when that subsidy is hidden behind language that implies the project pays for itself and will be a fruitful investment. 

The most important questions are not whether these projects generate economic activity. They are: 

• What will this asset cost taxpayers over time? 

• How does that compare to the revenues it generates to cover those costs? 

• What are we choosing not to fund or what maintenance are we choosing to defer to carry this obligation year after year? 

  
  

Every ongoing subsidy represents a trade-off. Streets. Staffing. Deferred maintenance. Those trade-offs do not disappear because a new facility has met popular demand. 

What Comes Next

Across the country, similar logic is now being applied well beyond community recreation and tourism projects to large-scale professional and semi-professional sports facilities, where public entities are increasingly asked to absorb infrastructure costs while private interests retain control and upside. 

These conversations are unfolding at the same time many states and local governments are capping tax rates, reducing budgets, deferring maintenance, and struggling to fund core services. 

That tension deserves its own examination. 

Part 2 of this article (to be posted at a later date) will take a closer look at these high-profile public-private investments and what they reveal about risk, reward, and fiscal stewardship in an era of constraint. 

Jamie Sabbach is President & Principal with 110% Inc., a consulting firm which focuses on ethical decision making, adaptive leadership, and the financial sustainability of public parks and recreation. She can be reached at jsabbach@110percent.net.