Substitution effect

When the first phase of Ballpark Village opened, some downtown bar and restaurant owners complained that their former customers were now spending their dollars in the new complex. Concerns over how much the second phase will actually attract new business to the city remain.

“Not all tax revenue is newly generated by the project,” Spencer, the alderman, said. “There’s a lot of cannibalization.”

Indeed, the letter of intent from PricewaterhouseCoopers is the starkest example of potential reshuffling. Cordish says the accounting firm will take 40,000 to 50,000 square feet of the office space, according to bond documents.

An analysis from a city economic development analyst before the hotel was added to the project estimated about one third of the tax revenue generated would be revenue that otherwise would have been paid at existing establishments.

Williams said the city is concerned about the substitution effect from the new venue but that it built in conservative estimates and still sees a net gain from the project.