## A Simple Way to Frame the Gwinnett Stadium Tax Burden

If you are a Gwinnett taxpayer, how much will the stadium cost your family? Here is the simple answer: \$110 this year plus \$3 per year for the next 30 years, for a grand total of \$200 per household.

What percentage of the construction costs will be borne by taxpayers? 76%

Here is where these numbers come from.

Expenditures
Taxes Revenue: \$31,000,000 (\$12 million initial commitment + \$19 million from reserve fund)
Amount Borrowed: \$33,000,000
Total: \$64,000,000

Annual Debt Service on \$33,000,000: \$2,438,240 (30-year mortgage at 6.25%)

Rent: \$250,000
Ticket Fee: \$479,000 (variable with \$400,000 minimum)
Parking: \$284,000 (50% share of net receipts)
Naming Rights: \$100,000 (assumes \$450,000 deal with \$350,000 remitted to Braves/Liberty Media)
Total: \$1,130,000

Annual County Subsidy: \$1,325,240 (\$2,438,240 — \$1,130,000)

Estimated Gwinnett County Households in 2008: 279,820 (based on population and current 2.88 persons per household)
Population Growth: 3.8% (based on previous five years of growth)

Initial Tax Burden per Household: \$31,000,000/279,820: \$110
Annual Tax Burden to Cover Debt Service per Household: \$3 (mean burden, based on population growth)
Sum of Tax Burden over 30 years per Household: \$200 (\$110 + \$90)

% Public Contribution
Initial Contribution from Tax Revenue: 48% (\$31,000,000/\$64,000,000)
Contribution to Debt Service: 54% (\$1,325,240/\$2,438,240 = 54%; .54*\$33,000,000 = \$18,000,000 )
% Stadium paid by taxpayers: 76% ([(\$31,000,000+\$18,000,000)/\$64,000,000 = 76%)

What about the reported economic impact?

Few fields of empirical economic research offer virtual unanimity of findings. Yet, independent work on the economic impact of stadiums and arenas has uniformly found that there is no statistically significant positive correlation between sports facility construction and economic development (Baade and Dye, 1990; Baim, 1992; Rosentraub, 1994; Baade, 1996; Noll and Zimbalist, 1997; Waldon, 1997; Coates and Humphreys, 1999).

These results stand in distinct contrast to the promotional studies that are typically done by consulting firms under the hire of teams or local chambers of commerce supporting facility development. Typically, such promotional studies project future impact and almost inevitably adopt unrealistic assumptions regarding local value added, new spending, and associated multipliers. They often use a regional input-output model that depends on outdated technical coefficients which are treated as invariant to shifts in supply and demand (Center for Economic and Management Research, 1991; Deloitte & Touche, 1994, 1996; KPMG, 1996; Economic Research Associates, 1996; KPMG, 1998; C.H. Johnson Consulting, 1999).

Siegfried and Zimbalist, “The Economics of Sports Facilities and Their Communities,” Journal of Economic Perspectives, 2000.

Until the touted study is made public, I think it is safe to assume that the expected impact will be zero, at best.

## My Response to the Mitchell Report Study Response

My response to Brian J. Schmotzer, Jeff Switchenko, and Patrick D. Kilgo’s reply to my criticism of their study follows. I would like to thank the authors for offering their response; however, I do not think their explanations succeed in validating their study.

First let me address a few minor issues about which I will not go into significant depth. I have no problem with mixed effects, it just isn’t the model I would have used. In fact, in my initial critique I stated, “I suspect that it ought to get the job done”. Aging also is not a big issue, but I am appreciative that the authors took the steps to re-estimate their model according to my previous analysis. It appears that aging adjustments do not make much difference.

I see that our disagreements boil down to two points on which I will focus my remarks: coding and the statistical significance of the estimates.

On coding, the authors main argument is that coding is difficult in some cases, and that their coding choices “are not coding errors but simply differences of opinion.” We certainly do share a difference of opinion on this matter—after all, all disagreements come down to opinion—but, the authors claim that the coding that I previously believed resulted from human error was the result of conscious action. Thus, in this sense, their designations are deliberate choices, not coding errors. I believe that several of the designations discussed reveal a pattern of inconsistent assignment of steroid use that does not follow from their stated methodology. There are two main player examples at issue: David Segui and Barry Bonds.

In terms of Segui, the authors state the following.

He clearly is accused in the Mitchell Report of being a steroid user. There is no question about it. However, our task was to designate seasons of abuse – simply recognizing a player as an accused abuser was not good enough. Because of our strict criteria, we did not denote any of Segui’s years as steroid seasons. (We note here an actual mistake in our manuscript. We said 1995 and 2004 were denoted as steroid seasons when we actually denoted them as HGH seasons.)

First, the authors did make an error. 1995 and 2004 were not steroid seasons. This explains my confusion when I stated “I can find no explanation for the authors’ chosen steroid designations of 1994–1995 and 2004–2005.” Thus, the error was not in the coding, but in the mis-reporting of the coding. But it creates new confusion: why were 1995 (especially) and 2004 coded as HGH seasons? I can find no supporting documentation for these designations in the Mitchell Report. The authors did not provide an explanation in their response.

Second, the authors then include a list of quotes of accusations in the Mitchell Report to demonstrate ambiguities in the accusations. I appreciate the authors’ difficulty, and do not have a problem with employing a conservative standard. I stated in my initial critique, “This is certainly a defensible method—though, I would like to have seen results with “a more liberal reading” as well—however, I lack confidence that the authors employed their designation properly.” Upon further review, I still find their coding choices to be strange, in that the coding does not appear to form a consistent pattern.

The Mitchell Report includes four legible checks from Segui to Kirk Radomski from 2002–2004. The authors state:

the checks could have been written for HGH. In terms of the checks, we viewed this as weaker evidence since many unnamed players presumably wrote checks to Radomski for innocent items.

On page 151 of the Mitchell Report, Radomski states that he sold steroids to Segui, even going so far as to say that the growth hormone he was getting came from a doctor in Florida. The checks themselves are the most damning evidence in the entire report. This is physical evidence, backed with testimony from both parties that Segui’s relationship with Radomski was one of steroid seller and steroid purchaser. I believe it is unreasonable to assume that these checks could be for “innocent items.” If this is not considered “Other ancillary items including the source of the allegations and whether there is a paper trail of evidence”, then I don’t know what standard the authors have set, especially when viewed with flimsiness with which Segui and Bonds were identified as users at other times in their careers.

The authors state on page 3 of their paper Segui’s “paper trail of evidence with Radomski begins in 2004 and lasts through 2005.” Where does the 2004 date come from? David Segui didn’t even play baseball in 2005. Where did the 1994 and 1995 designations (see above) come from? I understand the difficulty in the decision to designate other years as steroid (or HGH) years, which is why I stated, “At the minimum, 2002 and 2003 should be listed as dirty.” I was acknowledging by their own standards he should have been declared a user at these times.

The case of Segui becomes more problematic when compared to Bonds’s case. If the physical evidence regarding Segui doesn’t meet the standard of “Other ancillary items including the source of the allegations and whether there is a paper trail of evidence”, then Bonds should have been listed as clean for the entire sample.

First, you suggest that 2001 should be labeled a steroid season. But this is based on the BALCO evidence and the Game of Shadows (or more precisely, the Mitchell Reports references to those sources). While these sources may be reliable, they are irrelevant for the present discussion because we used the seasons denoted by the Mitchell Report as our sole data source. This is obviously suboptimal (as we acknowledge in our paper) but based on this methodology the 2001 season should not be labeled a steroid season. To bring in other sources would be to slide down that slippery slope headfirst with no chance for objectivity to survive. Second, you suggest that 2004 should not be labeled a steroid season because the BALCO mess occurred in 2003. However, the Mitchell Report states that Anderson was removed from the clubhouse in 2004 but continued to work with Bonds after that. Further, the Giants asked Bonds to have no contact with Anderson early in 2005. Although we cannot confirm that Bonds did stop dealing with Anderson at that time, our conservativeness suggested that 2005 should not be a steroid season. But it seems that it is still reasonable to call 2004 a steroid season under that scenario (pages 126-127). This, too, is debatable.

First, I don’t necessarily think 2001 should be coded as a steroid season. As readers of this website know, I have been hesitant to condemn Bonds. He did first visit BALCO in 2001, but it is the start of the steroid designations in 2004 that make no sense to me. And the designation does not fit with with the excessive conservativeness for designating Segui and Bonds’s prior use.

— Four checks and testimony from the parties involved that these facilitated the purchase of steroids does not constitute a paper trail for Segui.

— Leaked grand jury testimony (which has since been released to the public) in which Bonds admits taking substances in 2002 and 2003 that prosecutors identified as performance-enhancing drugs (Bonds did not believe “The Cream” or “The Clear” were steroids) is not sufficient evidence of use. The Mitchell Report relies much on the investigation of Bonds, just as it relies heavily on the government investigation of Kirk Radomski.

— The Giants dismissing Anderson from the clubhouse in 2004 at a time when Jeff Novisky is monitoring Bonds’s every move and MLB has instituted testing is considered to be evidence of use.

In their rebuttal, the authors conclude “our decisions were not made lightly, and we hope you can see the merit of our methodology even if you don’t agree with it.” I see merits to a conservative “paper trail” methodology, but in practice the designations do not make sense. The implementation is seriously flawed. If I arranged the above choices on a spectrum of conservative and liberal designations, the one that gets coded dirty is the most liberal of the three. The coding of steroid use is not consistent, and I do not see how these designations can be defended as reasonable choices.

As you can see, the denoting of steroid seasons in some cases is a complicated task. We have made every effort to be conservative in our designations and to base them (to the extent possible) on strict evidence from the Mitchell Report. Luckily, the majority of cases were straightforward and are highly unlikely to contain any mistakes of note. Unluckily, a few of the cases were more difficult. We hope the above explanations illuminate more fully our rationale on those more ambiguous adjudications.

I disagree. In fact, when I re-read portions of the Mitchell Report after reading their paper, I found identifying specific years of use for most players listed in the report to be a difficult task. Segui and Bonds actually seem to be two of the simpler cases, and there does not appear to be a consistent standard for coding their potential use of steroids. And here is the real problem with the coding: where I can see what is being done, I observe it is being done incorrectly. This leads me to believe that coding is being done incorrectly with other players as well. I have no faith in the analysis, especially considering this study’s findings are at odds with the findings of other studies of Mitchell Report players by Cole and Stigler and The Milwaukee Sentinel (which interpreted its own findings incorrectly).

The authors also take the step of re-estimating the effect of designations on performance while adjusting the designations according to my suggestions. The new estimates are superior to the old estimates; however, this doesn’t allay my fears that coding errors may exist elsewhere. In addition, the authors do not report standard errors for determining statistical significance for their new estimates; therefore, it is impossible to know if “dirty” players improved their performances relative to “clean” players. This leads to the next point of contention: statistical significance.

I want to address the response to the robustness of the the results.

First, you suggest that the results are “fragile”. Quite the contrary. Under a variety of analysis assumptions, the steroid effect was always positive and nontrivial.

I did not dispute that the reported coefficient estimates are consistent across many specifications. I state the results are fragile, because when Bonds is removed, “dirty” players do not perform better than “clean” players at a statistically significant level. The fragility of the results comes from the fact that when Bonds is removed from the sample, the coefficient estimates of steroids use are no longer statistically different from zero. For readers not familiar with statistics, this means that the impact for those steroid-designated seasons is not meaningfully different from non-steroid seasons, given the typical deviations in performance for all players in this sample.

Second, you note that when Bonds is excluded from the model, the steroid effect is “not statistically significant”. It is understandable to infer that we did not focus our discussion on statistical significance because the p-values for some models were large. However, this is not the case. (We could have easily omitted p-values from our paper or omitted models with large p-values from our paper if we felt we had something to hide.) In fact, we presented p-values because it is traditional to do so for statistical models. But in reality, they are largely (one could argue, completely) irrelevant for this study. This is a census, not a sample. There is no sampling variability. The effect we observed in our models is the true effect by definition.

This is a curious response. The authors reported one significant p-value estimate (Model 1) in the paper’s abstract as evidence of a performance effect. “The effect of steroid use was an additional 0.58 ADJRC27, an increase in production of 12.6% (p=0.0108).” At one time, the authors believed the p-value to be relevant, and they were correct in their belief.

Now, they suggest that the p-values are not relevant because “This is a census, not a sample. There is no sampling variability. The effect we observed in our models is the true effect by definition.”

First, this is a sample that includes 1336 players had 50 plate appearances in a season from 1995–2007. Second, I am confused as to why the authors think this would be relevant if it was true. The p-values of the steroid coefficient reveal the likelihood that the two cohorts (because this is a binary variable) performed differently from one another. That is why the statistical programs the authors employed reported p-values along with the coefficient estimates. When Bonds is excluded from the sample, the p-values are greater than 0.05 in five of the six models that exclude Bonds (5,6,7, 11, and 12; 9 is the exception). The variance of the performances (which the p-value measures) is key. The standard errors indicate that though the estimate of change in performance in steroid seasons is positive, it is not outside the normal variation in player performance. The fact that the authors did not provide p-values in the revised tables leads me to believe that the new estimates are not statistically significant, either.

In summary, though the authors have offered responses to my criticisms, their rebuttal falls short of rectifying the problems that I previously identified. The coding choices are not consistent with the stated methodology, which makes it reasonable to assume that other coding problems exist. Also, estimates do not indicate that players coded as steroid users perform better than non-steroid users at statistically significant level. I thank the authors for their reply, but I do not agree their conclusions.

## Kudos to Gwinnett Daily Post

I’ve been critical of Gwinnett Daily Post’s coverage of the Braves stadium, because it has been slanted towards the pro-stadium position. I was happy to see the editors criticize the Board of Commissioners’s handling of the recent budget increase.

We expect more due diligence from our County Commission. Richard Tucker, board chairman of the Gwinnett Convention and Visitors Bureau, says “this happens every day in the real estate business” but it seems to happen much more in the public sector.

Because of the need to increase the budget, the commissioners are drawing from the reserve fund at a time when the county is tightening its belt. The county has implemented a hiring freeze, has asked police officers to not leave their cars idling and has switched schedules at some offices to make for four-day work weeks.

We don’t believe the commissioners care more about baseball than they do the county government, but with the way they’ve gone about getting this stadium it’s justifiable that some residents feel hoodwinked. The commissioners have turned a baseball stadium into a political football.

Though there have been bumps in the road on the way to getting the stadium built, we still believe the stadium and the Gwinnett Braves are an important addition to the county. Bert Nasuti, the commissioner who was the major impetus behind Gwinnett landing the team, insists the investment is worth it.

But at what cost? That’s what Gwinnett taxpayers are asking. And the answer, for now, is \$59 million, or \$19 million more than expected.

The commissioners should have a better grasp of those numbers. Like the players who are coming to Gwinnett next year, we expect them to keep their eyes on the ball.

In other words, if you want to model yourself after a Gwinnett County ballplayer, be more like Brian McCann—be patient and wait for a good pitch to drive—than Jeff Francouer—be aggressive and swing at everything.

## Even More on the Gwinnett Stadium Cost Increase

Last week, the Gwinnett Board of Commissioners approved a \$19 million budget increase to fund the new Gwinnett Braves stadium. It turns out that though the Board didn’t mention a word of the cost increase until the Friday before Labor Day, and voted on it the following Tuesday without discussion, county officials were aware of the cost increase well before this time. From the AJC’s Jeremy Redmon:

The cost for Gwinnett County’s taxpayer-funded minor league Braves stadium started to exceed the county’s \$40 million estimate as early as March — less than two months after the project was announced — and reached as high as \$62.4 million at one point, according to internal budget documents obtained Friday under Georgia’s Open Records Act.

A small group of Gwinnett Convention and Visitors Bureau and county officials ultimately decided to make \$19 million in changes and upgrades, much of which aren’t required for the Braves to play ball.

By March 31, the Triple-A ballpark had grown to 196,370 square feet, with a \$45 million price tag, the records show. A month later, it grew by more than 14,000 square feet and its cost ballooned to \$55.1 million.

Why didn’t the county disclose the cost increase until now?

“Anything we let out would have been a hypothetical number,” GCVB Chairman Richard Tucker said. “You wouldn’t call a press conference or issue a press release to say, ‘We have some preliminary bids in and it is tracking higher’ because all the time we were still looking at, ‘What can we eliminate that is in the design?’ And, in fact, all of the design had not even been done. It just doesn’t work that way.”

That is exactly what should have been said at a press conference. A degree of uncertainty about the exact increase is no excuse for withholding that the price tag would rise by a significant amount. As of March 31, the day before the Board voted to approve the stadium project, the stadium’s projected cost had increased by 12 percent to \$45 million. One month later, the cost was nearly 40-percent higher at \$55.1 million. There was ample opportunity to reveal that the price tag would rise significantly and that those funds would have to come from taxpayers. At the minimum, the anticipated cost increase should have been revealed before the July 15 primary and August 5 run-off elections.

A large chuck of the new expenditures are not necessary, and county officials concede that costs could go higher despite previously denying the potential for further cost increases last week.

But GCVB officials concede the stadium could be built without many of the additions, including the \$7.5 million plan to build a concourse surrounding the stadium, erect canopies over some of the seating and the entrance and upgrade finishes. The GCVB is also considering spending more for a high-definition scoreboard, though that amount is not finalized, a convention and visitors bureau official said.

Commissioner Bert Nasuti claims to have been surprised by the cost increase, but feels the expenditures are worth it.

County Commissioner Bert Nasuti said he was “stunned” when he first learned of the additional \$19 million cost from GCVB officials last month. Still, Nasuti, who also serves on the GCVB board, said he voted along with fellow Gwinnett commissioners last week to cover that amount with county reserve funds so the ballpark would be “first class.”

“We set a standard here of doing things correctly, doing things upscale, nice, family-friendly, user-friendly, good fan experience,” Nasuti said, adding county officials decided to “stick with that philosophy and build a first-class, state-of-the-art baseball stadium.”

Nasuti’s enthusiastic support is largely based on an economic impact study by the County’s economist. (per AJC’sMichael Pearson).

But Nasuti said the stadium is an economic development project that eventually will bring the county more in revenues than it costs to build.

“If you stop all economic development activity when there’s a downturn, then you’re going to punish yourself in the long term,” he said.

It’s unclear exactly how much money the stadium will bring into the county.

County economist Alife Meek has estimated that the 72 home games scheduled for the stadium will produce \$14.6 million in new economic activity in the county, a small portion of which the county will capture in the form of tax collections.

This study has not been released to the public. Nasuti has not responded to my request to supply the study. Meek, though he has challenged my criticism of his study’s conclusions, has also not provided me with the study. Until I see the this document and I am convinced that it has been done properly, I’m going to have to side with the vast economic literature that finds no economic impacts from stadium projects. No one should take this number at face value, any more than you should take up smoking because a tobacco industry study shows smoking isn’t related to lung cancer incidence.

At least Nasuti and I agree on one thing.

“The business model in my mind is as sound as it ever was,” said Commissioner Bert Nasuti, who came up with the idea of bringing baseball to Gwinnett County.

## A Response to My Critique of the Mitchell Report Study

I have received a response to my critique of Did Steroid Use Enhance the Performance of the Mitchell Batters? The Effect of Alleged Performance Enhancing Drug Use on Offensive Performance from 1995 to 2007 by Brian J. Schmotzer, Jeff Switchenko, and Patrick D. Kilgo.

What follows is the authors’ response. I will comment on this response within the next few days (Response now available). I thank the authors for responding to me.

— — —
Dear J.C.,

We read your review of our paper on your sabernomics.com website. In the interest of the pursuit of the truth, we have constructed a reply. We would be grateful if you would post it on your site. We have pasted our reply below. Please let us know if a different format would be helpful.

-Brian Schmotzer, Pat Kilgo, Jeff Switchenko

Thank you for your recent detailed examination of our study “Did Steroid Use Enhance the Performance of the Mitchell Batters? The Effect of Alleged Performance Enhancing Drug Use on Offensive Performance from 1995 to 2007,” published in the Journal of Quantitative Analysis in Sports. We would also like to thank you for giving us this opportunity to respond to your concerns on your blog. You state that your goal is to find the truth. We share that goal and hope that this discussion will help push us all closer to that ideal.

To start, we want to point out a few important aspects of our study that were not relayed to your readers in your initial review. First, the coding of seasons as PED seasons was made prior to any data analysis. We did not make any decisions with an eye toward a certain final result. All of the authors began this study agnostic about the effect of steroids in baseball – we underwent the study because we wanted to know what the answer actually is. Second, our study was designed to be ultra-conservative and in almost all cases our data was literally transcribed from the Mitchell Report. Only the cases that were not entirely obvious were listed in the “adjudication” portion of our article. Third, our choices were made with full knowledge that there are hundreds of other ways this could be done. Indeed, the cases you remark upon (Barry Bonds, Mark McGwire and David Segui) were three of the most difficult, with Segui certainly being the most frustrating case for reasons we will explain.

Because of its conservativeness, we envisioned our analysis as assigning the “lower bound” estimate of the steroid effect. (If we can agree that HGH is ineffectual, we will concentrate on steroids henceforth.) Certainly we could have taken more liberties with the text and designated many more seasons as steroids seasons; in fact, we could easily have referenced other sources of steroid abuse data. But this, for obvious reasons, is a slippery slope. The Mitchell Report was not designed as a data source so its conclusions are already limited. Further, the ambiguity surrounding some of the dates for a few players (David Segui among them) further limits the analysis when conservative criteria are in place.

Thus, in the interest of full disclosure, we included a very detailed Methods section describing some of the harder choices that had to be made. Also, we wrote an extensive section in our Discussion that plainly describes the limitations of our approach.

Your characterization of some of our decisions as “obvious factual errors” warrants special attention. In fact, these are not coding errors but simply differences of opinion. Because we wanted to avoid the aforementioned slippery slope, we coded strictly by the dates listed in the report as corresponding to alleged steroid use. In some cases, however, this simple approach couldn’t adequately handle the ambiguities in the text.

This is perhaps best illustrated in the case of David Segui. He clearly is accused in the Mitchell Report of being a steroid user. There is no question about it. However, our task was to designate seasons of abuse – simply recognizing a player as an accused abuser was not good enough. Because of our strict criteria, we did not denote any of Segui’s years as steroid seasons. (We note here an actual mistake in our manuscript. We said 1995 and 2004 were denoted as steroid seasons when we actually denoted them as HGH seasons.) Consider the quotes from the Mitchell Report that you referenced:

“In 1999 or 2000, Chuck Hawke, an attendant working in the visiting clubhouse in Kansas City, found syringes and vials that were hidden in an Oakley sunglasses bag when he was unpacking luggage for David Segui” (p. 110).

This statement does not specify a specific steroid season because a) no direct steroid use is alleged (remember that Segui is an admitted HGH user as well) and b) it is clear only 1 year is implicated but that year is not specified – there is no way to choose between 1999 and 2000, so we were not able to assign either.

“According to Radomski, Deca-Durabolin was Segui’s steroid of choice in the 1990s because it was safe, did not expire for three to four years, and was thought to help alleviate joint pain. Deca-Durabolin, however, stays in the body for up to a year or more and therefore is easily detectable in tests. Radomski said that Segui paid for the steroids by check although Radomski never asked him to pay for them. Radomski produced six checks drawn on David Segui’s checking account that were deposited into Radomski’s checking account….Radomski said he engaged in more than twelve transactions with Segui and dealt with Segui more than any other player. Toward the end of his career, Segui told Radomski that he had a growth hormone deficiency and was getting human growth hormone from a doctor in Florida (p. 151).

Again, we cannot implicate any specific season – the “1990s” was not specific enough for us to code a certain set of years. Also, there is the similar problem as before – the checks could have been written for HGH. In terms of the checks, we viewed this as weaker evidence since many unnamed players presumably wrote checks to Radomski for innocent items. Also, several of the checks are illegible with respect to dates.

“McNamee first learned about Kirk Radomski through David Segui during the 2000 season” (p. 170).

“Kirk Radomski recalled meeting McNamee through David Segui. Radomski confirmed that he supplied McNamee with human growth hormone and anabolic steroids from 2000 to 2004” (p. 174).

“Radomski believed that Santangelo was referred to him by David Segui when both played for the Expos between 1995 and 1997” (p. 182).

“According to Radomski, he was introduced to Lansing by David Segui while Segui and Lansing played together with the Expos….Radomski produced two \$1,000 money orders from Lansing, retrieved from his bank, made payable to Radomski; both were dated February 5, 2002” (pp. 196-197).

“Hairston was referred to Radomski by David Segui, his teammate on the Orioles from 2002 to 2004. Radomski said that he sold human growth hormone to Hairston on two or three occasions during 2003 and 2004” (p. 207).

While none of these quotes are particularly flattering for Segui, none of them define a steroid season allegation.

In conclusion, Segui is a frustrating case because he is clearly accused in the Report, but we found we just couldn’t assign any particular season to him based on our strict a priori conditions for deciding steroid seasons. It is easy to disagree with the outcome (no steroid seasons for Segui) because it doesn’t match common sense. However, our decisions were not made lightly, and we hope you can see the merit of our methodology even if you don’t agree with it.

Next consider McGwire. The discrepancy here is not about the designation of the 1998 season, it is about the designation of “andro”. Should it be classified as a steroid or not for these purposes? We freely admit to not being experts in the field of PEDs. We adhered to the layman’s explanations given in the media that andro is a precursor to steroids. Though it is a banned substance, the rationale behind our inclusion of this season is certainly debatable.

Finally consider Bonds. First, you suggest that 2001 should be labeled a steroid season. But this is based on the BALCO evidence and the Game of Shadows (or more precisely, the Mitchell Reports references to those sources). While these sources may be reliable, they are irrelevant for the present discussion because we used the seasons denoted by the Mitchell Report as our sole data source. This is obviously suboptimal (as we acknowledge in our paper) but based on this methodology the 2001 season should not be labeled a steroid season. To bring in other sources would be to slide down that slippery slope headfirst with no chance for objectivity to survive. Second, you suggest that 2004 should not be labeled a steroid season because the BALCO mess occurred in 2003. However, the Mitchell Report states that Anderson was removed from the clubhouse in 2004 but continued to work with Bonds after that. Further, the Giants asked Bonds to have no contact with Anderson early in 2005. Although we cannot confirm that Bonds did stop dealing with Anderson at that time, our conservativeness suggested that 2005 should not be a steroid season. But it seems that it is still reasonable to call 2004 a steroid season under that scenario (pages 126-127). This, too, is debatable.

As you can see, the denoting of steroid seasons in some cases is a complicated task. We have made every effort to be conservative in our designations and to base them (to the extent possible) on strict evidence from the Mitchell Report. Luckily, the majority of cases were straightforward and are highly unlikely to contain any mistakes of note. Unluckily, a few of the cases were more difficult. We hope the above explanations illuminate more fully our rationale on those more ambiguous adjudications.

In addition to the steroid season designations, you made several other statements about our paper that we feel deserve attention.

First, you suggest that the results are “fragile”. Quite the contrary. Under a variety of analysis assumptions, the steroid effect was always positive and nontrivial.

Second, you note that when Bonds is excluded from the model, the steroid effect is “not statistically significant”. It is understandable to infer that we did not focus our discussion on statistical significance because the p-values for some models were large. However, this is not the case. (We could have easily omitted p-values from our paper or omitted models with large p-values from our paper if we felt we had something to hide.) In fact, we presented p-values because it is traditional to do so for statistical models. But in reality, they are largely (one could argue, completely) irrelevant for this study. This is a census, not a sample. There is no sampling variability. The effect we observed in our models is the true effect by definition.

Third, you state that you “don’t like the method used to account for aging”. Based on the data, the age effect is small. Our simple method is clearly not the best option available (as we acknowledge in our paper), but it should be sufficient to get the job done. There is certainly no evidence that our simple method would “bias” the results. The worst that it could be accused of is adding extra variance to the proceedings (which would weaken, not strengthen, our results).

Fourth, you state that a mixed model “isn’t one that I would choose”. We would be interested to hear your reasons for this. The mixed effects model is the gold standard for repeated measures data with both fixed effects (PED use) and random effects (player). We are aware of no other analysis method that would be sufficient for the problem at hand.

Lastly, the most common request we hear when we talk to people about our study is for a new analysis with more liberal criteria employed for determining steroid seasons (you made the same request). We resist the urge to comply because of the slippery slope. It would be easy to call many of McGwire’s best seasons (not just 1998) steroid seasons. Similarly for Bonds or even Sammy Sosa (although he’s never been formally accused). There is little doubt that we could “cherry-pick” seasons to label as steroid seasons that would lead to a massive estimate of the steroids effect. However, this would be an egregious example of selection bias on our part and is not befitting our goal of remaining impartial researchers investigating the truth.

Another arena we want to avoid is providing a new analysis every time we hear about a critic who disagrees with our steroid season designations. While you disagree with us regarding Bonds, McGwire, and Segui, the next critic will invariably disagree with us both. To look at every conceivable combination of steroid seasons is simply not possible. Nevertheless, we have attempted to provide an analysis that closely matches what your review suggests. To that end, we modified our database in the following ways (with quotes from your review):

— Bonds: We added 2001 and 2002 as steroid seasons and removed 2004 (“The Mitchell Report does not pinpoint any PED use in 2004; however, it does document his first visit to BALCO in 2001”)

— McGwire: We removed 1998 as a steroid season (“if McGwire’s hitting success was fueled by PED use, andro was not the culprit”)

— Segui: We added all of his seasons as steroid seasons (“There appears to be strong evidence that Segui was an active user of steroids continuously during his major-league career”)

— Age Adjustment: We applied an age adjustment based on your latest study on aging in baseball – specifically we used the OPS column from Table 7, which shows the percent difference from peak performance by age (OPS is highly correlated with RC27, it seemed like the best choice) (“I don’t like the method used to account for aging, and I believe the method might bias the results”)

Below is the table of results from our paper versus the new results for this analysis.

Percent increase in offensive performance due to steroids:

# 1 2 3 4 5 6 7 8 9 10 11 12
Old 12.6 7.2 9.1 18 7 3.9 4.9 11.9 11.3 7.7 6.2 4.2
New 16.8 8.1 10.6 22.6 7 3.4 4.4 12.5 14.9 9 6.1 3.8

As you can see, the results are striking. In 9 out of 12 models, the estimated effect is the same or larger using your suggestions. The other 3 models see a modest decrease of about half a run.

(As a reminder, models 1-8 include all player seasons with at least 50 PA, models 9-12 include player seasons only from players mentioned in the Mitchell Report. Models 1-4 and 9-10 include Bonds, the other don’t. Model 1 includes a fixed effect for Mitchell players, model 2 centers each player on his own average, model 3 makes both adjustments, model 4 makes neither, and models 5-8 follow the same pattern. Models 9 and 11 are uncentered, models 10 and 12 are centered.)

To sum up, we feel that many of the issues you have raised as “obvious factual errors” should more fairly be described as differences of opinion. Our methodology, while not perfect, is defensible and leads to the best estimate of the steroids effect that has yet been published. Furthermore, the essential conclusion of our study does not change even when incorporating your suggested changes, which shows just how robust the result is. Based on the information that is out there in the Mitchell Report, we don’t see how you can come to any conclusion except that there is a substantial positive effect on offensive performance due to steroids.

Thanks again for the opportunity to respond. We hope this has been interesting for you and your readers; certainly your comments have been interesting and thought provoking for us.

Brian Schmotzer

Patrick Kilgo

Jeff Switchenko

— — —

My response.

## The Relevance of Kenerly’s Ownership Stake

As I mentioned in my previous post, the AJC claims to have viewed records that show that Gwinnett County Commissioner Kevin Kenerly did not purchase a tract of land near the new Gwinnet Braves stadium in October 2007. Even if this is the case, I think the AJC is missing the big story and not properly acknowledging the readers who discovered it.

AJC reporters Michael Pearson and Patrick Fox have run down the claims posted to this blog that Gwinnett County Commissioner Kevin Kenerly purchased land near the stadium three months before the deal was revealed to the public. They have found that the claims are incorrect.

Posts at this blog and at baseball economic J.C. Bradbury’s blog claim that Kenerly purchased the land in October 2007 – after county officials began secretly scouting for land for a new stadium but three months before the decision became public.

First, at least get the name of my blog right. Second, how about giving a little credit for tracking down the fact that a sitting commissioner holds a financial stake in the property? I didn’t do this, a few AJC readers did, I just put it in an easy-to-read format. I commend them for their investigative prowess.

The available records clearly indicate that the land was purchased on 10/18/2007 and that Kenerly’s company owns the land. AJC readers and I reported exactly what the Gwinnett County Tax Assessor indicated. While we may be technically incorrect, the confusion over the sale is understandable considering that it was based on faulty information provided by Gwinnett County. I think we deserve a little credit for noticing that Kenerly owns this land and may have purchased it under suspicious circumstances rather than just being told one aspect is incorrect.

But more importantly, does this fact kill the relevance of the story that Kenerly owns the land? The AJC seems to think so, for two reasons. First, Kenerly influence didn’t appear to be strong enough to land the stadium adjacent to his land.

Incidentally, the land is closer to another stadium site considered – and ultimately rejected – by Gwinnett County. That site is a 65-acre parcel at Buford Drive and I-85 owned by the Orkin family.

Kenerly’s land is adjacent to that property.

So what? The fact that he didn’t get the best possible deal doesn’t prevent him from benefiting from this deal. He clearly will benefit from game traffic or improvements to roads that will raise his property value. In fact, I’m not sure if there is much additional benefit to being directly next to the stadium. When the stadium went over budget, Kenerly voted for allocating \$19 million of the county’s budget in a way that would use tax dollars to his personal benefit. It is a clear conflict of interest that he should have made public.

Second, Kenerly says he’s trying to sell his land.

Kenerly, who works as a real estate investor, told the Atlanta Journal-Constititution Thursday that he’s not interested in buying any land along the Ga. 20 corridor, including any near the stadium.

“With the way the economy is right now, I don’t think anybody is looking to purchase land,” he said.

He sold half of his ownership of the land in October to raise cash, and said he would like to sell the rest of it as well.

“I’m trying to unload everything,” he said.

This increases his incentive to improve the value of the land. He’s looking for cash now and wants to sell. What better way to make his property more attractive to potential investors than to get a shiny new stadium built within walking distance of his property?

The big issue here is the ownership of nearby property; the fact that he might have acquired it at an inappropriate time only would have added to the story. This fact needs to be published in the city’s largest newspaper. The story isn’t dead, and I think Gwinnett residents ought to know about Kenerly’s stake in nearby property.

Just today, I told a friend of mine who lives in Gwinnett County, “Kenerly owns land just down the street from the stadium.” I didn’t say a word about the timing of the sale. He responded, “I knew there was something dirty going on.” Maybe there is, maybe there isn’t, but this certainly deserves further scrutiny.

## Gwinnett’s Phantom Menace Revealed

Though it’s not my favorite movie of the Star Wars saga, the premise of The Phantom Menace is a good one. We begin with a few officials bending laws for personal gain. It’s a familiar occurrence in life, but it just didn’t feel right; there had to be something else at work. We later learn that the real problem is that the Chancellor is a Sith Lord, a much bigger deal.

There are no Sith Lords in Gwinnett County—nor the world for that matter—but I think we have now uncovered something more than a few politicians trying to score points as good guys for bringing a baseball team to town. Some discussion in Rick Badie’s AJC blog led to an interesting discovery. I am merely reporting what others have uncovered.

On October 18, 2007, a corporation operated by County Commissioner Kevin Kenerly purchased a large tract of land across the street from the site of the new Gwinnett Braves stadium. You can find a map on the Gwinnett County Tax Assessor’s site. The lot is shaded and is numbered 7146 002. The Gwinnett Braves stadium is being built across Buford Drive just south of Rock Springs Road.

The owner is not immediately apparent until you dig into government records. The listed owner of the lot is listed as I-85/GA 20 VENTURES INC (click on “View Details”).

 Identify layer Land Parcels
 2 Features found. Showing 1 to 2

Attribute Value
Pin  7146 002
Lot  2
Assessor Information
7146 002
PIN  7146 002
Owner Information

 R7146 002 Owner Name I-85/GA 20 VENTURES INC Mailing Address 40 TECHNOLOGY PKWY S STE 300 City, ST ZIPCode NORCROSS ,GA 30092-2924
Property Information

 R7146 002 Location Address WOODWARD MILL RD Location City/County COUNTY Assessment Neighborhood 9113 Legal Acres 29.2800 Ac. Dwelling Value (appraised) \$0 Land Value (appraised) \$3826300 Total Value (appraised) \$3826300 Dwelling Value (assessed) \$0 Land Value (assessed) \$1530520 Total Value (assessed) \$1530520 Zone Description C2-General Business
Sales Information

 R7146 002 1 – Sale Date 10/18/2007 Sale Amount \$3000000 Deed Book Page 48436 505 2 – Sale Date 09/12/1997 Sale Amount \$0 Deed Book Page 14734 00191 3 – Sale Date 12/15/1994 Sale Amount \$0 Deed Book Page 10934 00121
Building Information
Stormwater Billing Information
Pin  7146 002
Lot
Assessor Information
Stormwater Billing Information

Who runs I-85/GA 20 Ventures, Inc.? To find this out, we can go to the Georgia Secretary of State’s Corporation Division and search the record of corporations. There we find the following: Commissioner Kenerly is the CEO, CFO, Secretary, and Registered Agent of the corporation.

Next, let’s analyze the date of purchase of the land. When did discussion of bringing the Braves to Gwinnett begin? According to Daily Report, serious talks with the Braves began in October 2007.

Co-founding partner R. Lee Tucker Jr. and associate Christopher T. Wilson were lead counsel to the Gwinnett Convention and Visitors Bureau on its negotiations with the Braves on moving the team’s AAA International League franchise to Gwinnett from Richmond, Va.

Tucker and Wilson said they’ve been in talks with the Braves on behalf of their client since October and there is much more legal work left to be completed, such as finalizing a long-term agreement between the Braves and Gwinnett and hammering out the details of a lease agreement on a new stadium.

Here is what we know. The County was engaged in negotiations with the Braves to bring its Triple-A club to Gwinnett , and a sitting commissioner possibly used this inside information to purchase land that would benefit from increased traffic (see the update below). Furthermore, after the land purchase was made, and negotiations were ongoing, the commissioner had strong financial incentives to make sure the deal happened.

Following Tuesday’s meeting, where the Board allocated an additional \$19 million to the stadium, Kenerly was bubbling with excitement over the new stadium.

“I’m excited,” said Commissioner Kevin Kenerly, who likened the decision to imposing the same standards on the county as he did in a rezoning case that day. “It’s going to cost more money, but at the end of the day, it’s going to be better for the community.”

UPDATE: AJC is reporting that the October sale of land was a transfer to of a 50 percent stake to his partners, not a new acquisition of land.

## More on “Democracy”

The decision Tuesday to spend another \$19 million of Gwinnett County’s savings to pay for a 50 percent cost increase in the county’s new stadium was so straightforward, it didn’t require any public discussion or debate, county commissioners said.

The commission voted to spend the money as part of its consent agenda, a package of typically non-controversial items that on Tuesday included filling a vacancy on a golf commission, accepting the donation of dog food for the county animal shelter and spending \$16.7 million to replace county transit buses.

Commissioners said the decision didn’t require public debate because there was little choice but to approve the money, without which project officials said they could not build the stadium currently coming out of the ground on Buford Drive near I-85 in Lawrenceville. The stadium will cost \$59 million, up from an initial estimate of \$40 million.

Yet, at least two citizens (Don Shaw and Lee Baker) attended the hearing who had something to say and were not permitted to voice their opposition.

But anyway, at least one commissioner feels your pain.

Commissioner Mike Beaudreau, who is known for keeping an eye on county spending, said he lost sleep over the decision. He said he even considered plowing over what has been built so far and converting the land to a county park.

But because the county has to have revenues to pay back the bonds, he said the only choice was to move forward and create a stellar ballpark.

“I felt it was the only thing we could do that was fiscally responsible, believe it or not,” he said. “I felt we had no other choice.”

Yeah, Beaudreau is a real pit bull when it comes to combating government waste.

He looks all broken-up, doesn’t he? As for keeping an eye on county spending, he seems to be more concerned about increasing taxes than cutting spending. This is from a March 28 Op-Ed that he wrote.

It is our job as commissioners to listen to input from our constituents and then make informed decisions as to the level of service desired by county citizens. It is clear that our citizens want more than merely the status quo. For the legislature to put us on a path where all local governments cannot even keep up with inflation in terms of service levels is probably unworkable in most, if not all, parts of Georgia. I can tell you for sure that it will hurt Gwinnett County.

While I may have only scratched the surface on some of the policy questions, the real point of my writing to you is to ask that you not do anything that strips away the decision-making capability of school boards, city councils and county commissioners. Do not cap our revenues or our ability to adjust millage rates. Please do not limit assessments to some artificial growth rate. Please do not enact some one-size-fits-all policy without first examining all the facts. Services are unfortunately not free, and we need to be able to respond to what is going on in our local areas.

Give me a break, Mike. You voted for this boondoogle. Don’t try and have it both ways. And please, stop describing yourself as a fiscal conservative. You’re an old-fashioned tax-and-spend liberal, embrace it.

Addendum: I forgot to mention that the Gwinnett Daily Post did not report the fact that the commissioners did not allow any discussion.

## “Democracy” at Work

AJC

The Gwinnett County Commission will vote today to spend another \$19 million on its new baseball stadium without debate or public discussion.

At its morning work session today, the commission voted to add the payment to its “consent agenda,” a package of issues voted on with a single vote and no discussion at its afternoon business session. That meeting happens at 2 p.m.