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Economic impact more than numbers

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Wayne Hasenbalg hopes to use the game to bring other big events to the state.
Wayne Hasenbalg hopes to use the game to bring other big events to the state. - (AARON HOUSTON)

All those big numbers about the economic impact Super Bowl XLVIII will have on New Jersey — you know, the numbers so big few people truly understand them anyway — don't give them another thought.

For state officials, hosting the first cold-weather outdoor Super Bowl Sunday at MetLife Stadium is a chance to shine when the logistical demands have never been greater. Meeting those challenges can only help New Jersey's long-term prospects for landing other marquee events.

"That, at the end of the day, will add economic value to the state," Sports & Exposition Authority President and CEO Wayne Hasenbalg said. "And that's what this is all about."

The agency is helping the NFL marshal the resources for complex issues such as security, transportation and weather during events that will draw hundreds of thousands of visitors to New York and New Jersey this week.

Ensuring the state can deliver those services is "one of the legacies of this Super Bowl that I would like to see," Hasenbalg said, especially with the memories of incidents that have marred other recent games.

Chief among them is the ice storm that crippled the Dallas-Fort Worth area when it hosted the 2011 Super Bowl.

"(It) was (not) necessarily anything they did wrong, but they got caught in a weather situation that, unfortunately for them, they weren't prepared for," Hasenbalg said.

"And everybody in the world knew about it."

A smooth operation can only help the infusion of economic activity that's expected this week. Jim Kirkos, CEO of the Meadowlands Regional Chamber of Commerce, said "there's been this late flurry of activation," citing hotels that are filled around North Jersey and at least five towns with formal community events tied to the game.

Kirkos also estimated that about a dozen area restaurants and banquet facilities were booked for private functions by entities involved with the game, such as the Pro Football Hall of Fame's "Super Sunday Tailgate" at Redd's Restaurant & Bar in Carlstadt.

Notably, Kirkos said, those venues are booked for Saturday and Sunday by users who want to be in New Jersey — and not in Manhattan.

"We're not going to get the Maxim party," Kirkos said, referring to the men's magazine's annual bash in the city. "But on Super Bowl Sunday, corporate entertaining wants to be close to the stadium, and you can't be closer to the stadium than where we are."

The NY/NJ Super Bowl Host Committee has estimated Super Bowl week will generate $550 million in economic activity, $70 million more than the calculated impact of last year's game in New Orleans.

But those figures are always subject to criticism by skeptical economists, who claim the NFL overstates its impact in order to stoke demand and justify expenses borne by would-be host cities.

Victor Matheson, a sports economist at the College of the Holy Cross in Massachusetts, believes the actual impact ranges between one-tenth and one-quarter of those projections, he said.

The studies commissioned by organizers often don't account for the "substitution effect" — when local residents spend their cash at the event rather than elsewhere in the economy — or when the money spent simply leaves the city for the coffers of a hotel chain or another national company.

"That's the inherent problem in the studies that are done," Matheson said. "They do a lot of the adding and the multiplying, but they're not very good at the subtracting."

Still, he said the size and setting of this year's game should help it reach the high side of his range for economic benefit.

The tourism industry is normally slow this time of year in New York and New Jersey, Matheson said, so Super Bowl visitors are not "crowding out" regular hotel guests as they do in warmer-weather cities.

Hoteliers in the Garden State can attest to that.

"You may have days when you're sold out here and there, but normally at this time of year you wouldn't be pushing sellouts on a regular basis," said Nicholas Pappagallo, general manager of the Courtyard by Marriott in downtown Newark.

The nearby Prudential Center is hosting the high-profile Super Bowl media day Tuesday, plus an Ultimate Fighting Championship match that he said is helping fill the hotel on Feb. 1.

What's more, the festivities are a good source of exposure for the 16-month-old hotel, especially with the more than 200 events that come to the arena next door. It can only help.

"If these are sports fans coming in, there's a good chance they may be coming in for a different kind of event," Pappagallo said. "And we want to make sure they know we're here, and that we're their first choice when they're coming back to this area."

Frank Vuono, co-founder of 16W Marketing in Rutherford, is especially bullish on this week's economic jolt.

Vuono estimated about 30 percent of Super Bowl visitors come from the New York area, citing its appeal to big business and Wall Street.

You might think it dulls the impact that they're already here, Vuono said, but it means those people "who normally don't show up until Thursday or Friday … are already in the marketplace (today), and they're already looking for something to do as it relates to the Super Bowl."

But it's the out-of-towners who are perhaps most important in ensuring a long-term economic gain for New Jersey. Local businesses must use their hospitality to leave a lasting mark, Kirkos said, noting that they "didn't have the wherewithal to dress up the region and put banners on every pole" in the Meadowlands area.

And it seems they're heeding the call: Kirkos said nearly 3,000 workers and business people signed up for the "warm welcome" training offered by Bergen County Community College in advance of the Super Bowl.

"We're really relying on each individual stakeholder providing that great experience," Kirkos said. "If in fact we're successful … then people will remember us, and they will come back."

E-mail to: joshb@njbiz.com
On Twitter: @joshburdnj

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Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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