What is the track's opportunity cost?
June 12, 2008 · Updated 4:57 PM
According to an old adage, a bird in the hand is worth two in the bush; but this presumes the bird already in hand is of a kind that is being sought.
The prospect of an automobile racing speedway in South Kitsap might be looked upon as a bird in the hand.
While there are many hopes and plans for economic development in the South Kitsap Industrial Area (SKIA), there seems to be no one in line alongside the International Speedway Corp. (ISC) proposing any other sizeable project in the SKIA.
The recent study approved by the Port of Bremerton identified approximately 1,500 acres of SKIA land that are available for development. Thats a lot of land, but so is the number of new jobs which could exist within the SKIA if it were fully utilized by new development over the next 15 years 9,350.
The ISC speedway would create a few dozen jobs, but would use several hundred acres, so is it really the kind of development the public ought to fund?
As noted by 26th District Rep. Derek Kilmer (D-Gig Harbor) in July during an economic development discussion among Kitsap business leaders, one approach to increasing economic activity and creating jobs is to focus on businesses that have a tendency to grow in clusters.
For the sake of discussion, they identified five types of industry or commerce amenable to clustered development aerospace, clean technology, international trade, information technology and life sciences.
Kilmer noted that a racetrack doesnt fit within any of those areas, and that there needs to be some thought given to the opportunity costs of using available land and revenue to build a speedway.
He may be a rookie in the Legislature, but Kilmer seems able to get to the heart of the matter quickly when the topic involves his strong suit economic development.
If the speedway is to be built using public funds, one ought to consider the fact that future opportunities would be lost once the land and money are used to build the speedway.
The other side of this question is whether building the speedway would make it more likely that the ultimate goal of economic development could be achieved.
The speedway idea doesnt mesh with the types of industry and commerce identified for that particular discussion of clustered development, but this doesnt make it inappropriate.
If it seems likely to spark other desirable economic development, a speedway could be the bird in hand that we want.
As we await disclosure of ISCs public-private partnership financing plan, it would be nice if our political leaders spent a little more time publicly discussing just what they anticipate as the likely future effect of a speedway.
No matter whether the land is used for a speedway or some other development, there would be some level of public expenditure for things such as greater road and sewer capacity.
And since there would be SKIA land still unused after construction of a speedway, one shouldnt forget that public expenditures on infrastructure improvements could make the remaining area more attractive to other people with other development ideas.
Its not as though we would only be spending tax revenue to accommodate a speedway; its just that the speedway happens to be the only bird in hand at the moment.
State Sen. Tim Sheldon (D-Potlatch) has said he favors public expenditures for infrastructure improvements, but not for the costs of constructing the speedway itself.
Sheldons initial take on that aspect seems to be correct. If ISC wants to profit from a speedway, it should pay to build it.
Asking the public to pay a big share of the cost of building the speedway itself would be a strange partnership indeed. We would get to pay, and our private partner would receive a bigger and earlier profit than if ISC paid the costs to build its own facility.
On the other hand, asking the public to pay for infrastructure improvements that could lead to the kind of economic growth we desire might not be such a bad deal.
Good economic growth doesnt always follow the construction of good roads, but it seems fair to say that the absence of transportation infrastructure usually hinders economic development.
Rather than pass up the opportunity that may accompany the speedway proposal simply because of the probable costs involved, we ought to be considering how the needed public expenditures may move us toward our ultimate goal.
If it were probable that industrial and commercial development would occur without the expenditure of any public funds, we almost certainly wouldnt be wondering whether this particular opportunity is one we ought to take. There would already be more jobs in this area than we could fill.
Robert Meadows is a Port Orchard resident.