Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Monday, July 06, 2015

The financial cost to the public of building a football stadium

I wrote on this topic last week ("San Diego may do better without the NFL: Economically, almost anything beats public funding for a new Chargers stadium") but it's worth mentioning again because of a shocking column in the San Diego Union-Tribune.

It's shocking because the column says that putting public monies towards football stadium has insubstantial value. It focuses on the high cost of stadiums, of which about half is publicly funded, based on recent stadium construction projects. From the article:
A good start would be to fully appreciate why funding a new NFL stadium is such a bad business idea for the public.

For openers, it’s incredibly expensive. Based on recent NFL deals in mid-sized markets like San Diego’s, the Chargers are unlikely to settle for less than a $1.2 billion venue, with just $200 million or so coming from its owners.

About half of the construction cost, say $600 million, would come from the public. The rest, $400 million, presumably would come from fans as “seat licenses” and an NFL loan financed by club seat revenues, along with naming rights from an advertiser.

And the public generally doesn’t get an accurate estimate of longer-term costs, such as foregone property taxes, upkeep and operating subsidies, according to a 2012 study of public-private deals by University of Michigan planning and sports management professor Judith Grant Long.

Such hidden costs add 25 percent to the average total project, she estimated. If you’re keeping score at home, being average would push San Diego’s public tab to $900 million.
Long's work was published as Public-Private Partnerships for Major League Sports Facilities.

One alternative suggested by the columnist is to develop the proposed location for a new stadium as a new campus for San Diego State University, which rejects 70% of its applicants, in part because the university's campus is constrained.

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4 Comments:

At 1:22 PM, Anonymous Anonymous said...

If you haven't seen this already...
http://www.washingtoncitypaper.com/blogs/looselips/2015/06/23/jack-evans-baseball-hero/
-EE

 
At 3:10 PM, Anonymous Anonymous said...

And another interesting article and approach on stadiums.

http://www.bizjournals.com/sanfrancisco/blog/2015/07/oakland-raiders-nfl-coliseum-city-floyd-kephart.html

-EE

 
At 3:29 PM, Blogger Richard Layman said...

! Thank you finding and sharing this article. Interesting that the stadium portion of "non=game events" is pegged at $4MM/year in gross revenue.

 
At 3:33 PM, Blogger Richard Layman said...

the other thing, way more important, about this piece is how now such proposals are being developed as real estate plays, with ancillary development rights, controlled by the football team or companies related to it.

this isn't totally new, after all, key to the Dodgers moving to LA was getting free land and other land to develop.

But typically football stadiums aren't part of bigger programs, unlike arenas. And e.g. the Nationals Stadium is part of a master plan of development, but it is only happenstance that the team owners, a real estate related family, have a project or two in the neighborhood.

I see many more plans now of integrating sports facilities with a broad array of retail, housing etc.

The current round of stadium proposals in Los Angeles, plus this one from Oakland, are the first to really do this with football, although my understanding is there is something similar going on with the stadium in the Meadowlands in NJ.

 

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