Local economy steady in light of NCAA sanctions, Sandusky scandal

mmorgan@centredaily.comNovember 5, 2012 

The State College economy was on the verge of a collapse.

The NCAA was throwing around the idea of giving the football team a four-year stint of the so-called “death penalty,” and an empty Beaver Stadium would have been devastating for area businesses.

The Jerry Sandusky child sex abuse scandal was taking its toll on the area, and uncertainty swirled around local shops.

Now, about a year since the indictment of the now convicted child predator, the situation is not as dire.

NCAA President Mark Emmert handed down sanctions against the football team that were expected to be crippling, including a four-year bowl ban and a reduction of scholarships. But there still is football at Beaver Stadium, and approximately 100,000 people still flock to downtown businesses each home weekend.

Feeling the sting

Hotel State College and Co. owner Mike Desmond said he has felt the sting of the lower football attendance that has failed to break 100,000 in four of five home games, which he believes shows a lack of commitment from some fans.

“It has put a small dent in our business,” he said. “That lack of spirit carries over in the community and over the course of a week and month and football season.”

But he said the fans who are attending the games seem more committed than ever helping to mitigate the losses from the lowered foot traffic.

Desmond owns local businesses The Corner Room, Zeno’s Pub, Bill Pickle’s Tap Room, Allen Street Grill and Indigo.

In addition to the lower attendance, some retailers are experiencing direct effects from the sanctions.

Family Clothesline store coordinator and buyer Tracy Bell said last month that the lack of bowl-related apparel these next four years will hurt the businesses as the items are normally big sellers. She added that the atmosphere that surrounds bowl games also drives sales of general Penn State clothing, but the store is hoping to do as much business this season as last.

Football weekend traffic

The Stevens Motel owner Jeff Harman still has been filling his rooms on football weekends, but it’s taking a little bit longer than normal.

“I have seen a slight impact in demand but not to the point where I’m not filling my rooms,” he said,

Thus far he has not had to make any policy changes or change room rates and hopes he won’t have to. Football attendance is a big determinant of demand for his hotel.

Harman said there was a slight decrease in demand last season as well after the Seat Transfer and Equity Program was instituted, requiring some season ticket holders to make larger donations to the Nittany Lion Club to maintain their seats.

Despite the lower attendance, State College Borough Parking Manager Charles DeBow said the numbers in downtown parking garages are up significantly. Garage revenue is up about $25,000 through the first five home games, which marks a 17 percent increase from the same point last season.

They have also parked slightly below 20,000 cars up from about 15,000 last season.

“It is very interesting,” DeBow said. “Attendance is down, but there doesn’t seem to be the sense that it’s hurting downtown traffic at all.”

A possible explanation is the smaller number of noon games, which are statistically the lowest-grossing games for the parking garages. There have been two noon kicks this season compared with four last year.

Whatever the cause, DeBow hopes the trend continues.

“I am extremely happy with the way that the revenue has flowed through the first five games this year,” he said.

Coming together

State College Mayor Elizabeth Goreham has been making a concerted effort to shop more locally and dine at local eateries.

Goreham said she has been happy with the way the area has come together over the past year, especially commending the Chamber of Business and Industry of Centre County and its “Together We Are One” campaign.

“The business community as a whole has really come together and done a lot of things to enhance the attractiveness and to remind people of our community and the importance of our community,” she said.

CBICC President and CEO Vern Squier said the issue is at the forefront of the chamber’s mind, and leaders are doing everything they can to mitigate the effect of the scandal on the county’s businesses.

He said the economy has shown “a degree of resiliency,” and community bonding efforts are helping with that cause.

“The program has been a great success so far,” Squier said. “We are hearing from people that they are terribly pleased that something has been done.”

Downtown Improvement District Executive Director George Arnold said the football team is leading by example regarding the togetherness movement, and that has rubbed off on the business community.

He added that everyone understands that the area is bigger than a football team, but the success of the Nittany Lions has been a boon for the county.

“There’s nothing like seeing a team coming together,” he said. “You can’t help feeling encouraged by that.”

Moving forward

One year and more than half a football season has passed since Centre County was rocked by one of the biggest scandals in college sports history, but the business community realizes it’s far from over.

Desmond said he is a little worried about what the future may hold, but the dedication of head coach Bill O’Brien and area residents will be key during the continued healing process.

“The sanctions, if they continue, will continue to make if difficult for Coach O’Brien and Penn State and, in turn, local businesses,” he said, “but he, as a coach, is really showing leadership and people throughout the community and leaders are willing to do whatever it takes.”

Squier said it’s too early to tell how long it will be before the area gets back to the way it was with the looming trials of Gary Schultz, Tim Curley and now former President Graham Spanier.

He also said the support of the alumni will be important and the chamber will do everything it can.

“We’re here to help provide what support we can to be part of a solution on a ‘go-forward’ basis,” he said.

Harman added that the success of the football team going forward will play a role as well, but he isn‘t planning on having to change rates or concerned he will fall on hard times.

The community will just keep throwing punches and attempting to keep its head securely above water.

“Whatever they throw at us we keep shaking it off, standing back up again and that’s part of our story,” Arnold said.

Matt Morgan can be reached at 235-3928. Follow him on Twitter @MetroMattMorgan.

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