WASHINGTON -- Denver and Miami could score a few runs with bond rating agencies when major league baseball's National League expands its membership to those cities in 1993, according to Standard & Poor's Corp.
The National League's selection of the two cities to host expansion ball clubs "is a positive rating factor for the affected local governments," writes Robert F. Durante in Standard & Poor's June 17 Credit Week. The agency rates Miami's bonds A-plus and Denver's AA.
But Mr. Durante, an assistant vice president at Standard & Poor's, says the new teams' impact on the cities could be softened by a poor stadium location, tax structures that would not fully capture the full extend of economic activity spurred by the new ball clubs, or the presence of other teams.
For example, Miami's new team will play in Joe Robbie Stadium, a somewhat isolated structure. That isolation could mitigate some of the economic benefits of hosting a ball club, such as those derived from retail sales made before or after games.
In Denver, the incremental benefits from baseball-related activities could be lessened by the presence of a triple-A farm team, the Denver Zephyrs.
Nevertheless, Mr. Durante sees the new baseball teams as having mostly positive effects for the Miami and Denver areas.
Although its regional economy is generally healthy, Miami is not as attractive as other Florida metropolitan areas, and it is plagued by congestion and high crime rates.
"Major league baseball provides an opportunity for Miami to reverse trends and improve its image," Mr. Durante writes. A team might help lure more retirees to Miami, and "some other economic and financial benefits of baseball could also accrue to the local governments in Broward and Palm Beach counties."
In addition, a professional ball club may help Miami even out the "seasonality" of its tourist base. Motel and hotel occupancy rates in Miami, along with tourist-related revenues, tend to be at their lowest levels during the baseball season.
Likewise, baseball could do wonders for Denver, which has experienced weakness in its economy since the mid-1980's, especially in energy and agriculture. Even as those sectors rebound, cutbacks in defense spending and a sluggish tourism industry could slow the economy, although, Mr. Durante says, "the region could be poised for modest growth in the 1990s."
Mr. Durante reports that major league baseball "should strengthen Denver's tourism industry and have a material impact on the summer tourist season, which is more regional and flexible than the ski-bound winter season."
He says the new team also will complement Denver's $130 million convention center, which opened last year. In addition, Mr. Durante says, Denver should reap economic benefits because its proposed stadium site is located near the city's central business district.
According to Mr. Durante, Standard & Poor's will assess the financial impact of the teams on their host cities by examining their revenue structures to see how Denver and Miami can harvest the economic benefits of the teams.
In the end, however, the intangible benefits of major league status could help the two cities more than anything else, Mr. Durante says. "The addition of a team can improve the quality of life and enhance its attractiveness," he writes. "Economic development efforts could encourage unrelated business activity or retain existing industries."