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.

Sunday, January 14, 2018

Better understanding of how to benefit from sports tourism

The Boston Globe has an article, "Tourism and sports win big by teaming up," extolling the value of sports-related tourism, such as the creation of halls of fame, the under construction Olympics Museum in Colorado Springs ("U.S. Olympic Museum breaks ground in Colorado Springs," Denver Post), and people who go on "pilgrimages" visiting every baseball stadium in the US, etc.

The story didn't mention any sports tourism failures, such as the NASCAR Hall of Fame ("Nascar Hall of Fame Leaves Charlotte Home With Bank Debt"," Bloomberg).  And the difference between focusing on the sports industry, such as how Indianapolis has made attracting association headquarters a key economic development initiative ("(i) on Economic Development: Indy Doubles Down on Sports," Inside Indiana Business), how Oklahoma City is developing a focus in white water sports ("Oklahoma City's RiverSport Rapids, 'revitalized Oklahoma River," Daily Oklahoman), Colorado Springs being the headquarters of the US Olympic Committee, how increasingly the value of football bowls is as television programming, not as an augur of economic activity in the place where the game is played ("How college football bowl game system mixes socialism, capitalism," USA Today), or the lack of much economic return from supporting training camps for professional football teams ("Redskins camp is a bad deal for the RVA," Richmond Times-Dispatch)

Separately, the Norfolk Virginian-Pilot is covering the plan to construct a new "sports tourism" oriented field house in Virginia Beach, one specifically built to attract tournaments and other events generating hotel rooming nights, rather than a facility designed to meet the needs of area residents ("Virginia Beach selects firms to build and operate a new field house at the Oceanfront").

This coverage reminds me of the failure of many communities to replicate "the Bilbao Effect" ("Why can't the Bilbao Effect be reproduced? | Bilbao as an example of Transformational Projects Action Planning").

Like with the success of Bilbao's broader economic redevelopment agenda as well as the related insight that arts museums tend to be better at generating high attendance than other museum forms, the success or failure of "sports tourism" is more complicated, and ephemeral events such as the Olympics ("Big sporting events (World Cup/Olympics), economic development and trickle down economics" and "More thinking on "return on investment" from different types of sports facilities and DC, and an Olympics in DC") or annual events like the Super Bowl or All-Star Game rarely have the kind of immediate economic impact that is touted ("Economics of the Super Bowl and other big sports events") because these events stoke very narrow segments of the local economy -- food and beverage, some labor associated with hotels, and some limited transportation.

Certain types of events and activities are likely to have great positive impact, other types are not, and it is important to develop a framework to distinguish between the various types, comparable to the framework I have been developing concerning sports arenas and stadiums -- it's not that I think public funding is a good idea, I don't, but recognizing that the likelihood of successfully warding off public funding in most cases is remote, let's figure out how to best capitalize on the spending, to reap the greatest possible amount of benefit.

For arenas and stadiums, I came up with this framework:

Characteristics that support successful ancillary development associated with professional sports facilities: 
  • isolation or connection: how well is the facility integrated into the urban fabric beyond the stadium site and does it leverage, build upon, and extend the location and the community around it;
  • size of the facility (baseball, football, basketball, hockey, soccer), bigger stadiums--football stadiums specifically--are harder to integrate in the urban fabric;
  • frequency of events held by the primary tenant--baseball has 82 home games/year, football about 10 including pre-season, basketball and hockey have 41, soccer about 17--so football stadiums are very rarely used (according to the Chicago Sun-Times article "Emanuel mulling 5,000-seat expansion to Soldier Field," the facility holds about 22 events including annually, 12 non-football events);
  • how many teams use the facility, maximizing use and utility of the building--for example, Verizon Center in DC is used by professional men's and women's basketball, hockey, and one college basketball team for more than 100 sports events each year;
  • are events scheduled in a manner that facilitates attendee patronage of off-site businesses--a business isn't an anchor if it aims to not share its customers; the earlier events are scheduled, the harder it is to patronize retailers and restaurants located off-site, at night during the week, there is limited post-game spending as well, on the weekends it's a different story with more opportunity to patronize off-site establishments--teams manipulate scheduling to reduce spending outside of their on-site and 100% controlled facilities;
  • use of the facility for non-game events drawing additional patrons--such as concerts and other types of programming; and
  • how people travel to events: automobiles vs. transit--if automobiles are the primary way people get to events, then large amounts of parking usually in surface lots needs to be provided, making it difficult to foster ancillary development because of lack of land and poor quality of the visual environment, whereas if transit is the primary mode, then more land around a facility can be developed in ways that leverage the proximity of the arena. 
which is discussed specifically in this 2014 entry, "An arena subsidy project I'd probably favor: Sacramento," and is based in part on the arguments laid out in this 2012 piece, "Hampton Roads-Virginia Beach Kings professional basketball team."

Past entries that complement this listing include "Stadiums and economic effects," "Sports stadiums (and arenas) and local economic development and a DC soccer stadium," and "Stadiums and arenas as the enabling infrastructure for "money-making" platforms ."

WRT other sports tourism elements, more criteria need to be added to the above list, and a more honest evaluation of the economic impact on food, beverage, lodging, transportation, and other retail.

Like with Indianapolis, and note that Richmond's SportsBackers initiative is similar ("Case study in created events: Richmond's Sports Backers," Sports Planning Guide), a wide ranging plan specific to sports on the scale of what I call a "Transformational Projects Action Plan" is likely to be more successful than various one-off ventures.

... who knew that there is Sports Destination Magazine?

Note that wrt local-regional museums and exhibits on local sports, the Heinz Center in Pittsburgh does a particularly good job with its Western Pennsylvania Sports Museum.  The failure of the Sports Legends Museum in Baltimore ("Sports Legends Museum closes its doors," Baltimore Sun) likely demonstrates that stand alone regional museums dedicated to local sports are less likely to be successful than those programs which are part of larger museums.

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At 8:09 PM, Blogger Paul Meissner said...

Good piece Richard. So, when it comes to stadiums for football (American football that is), I would not be surprised if not a single one of the 31 NFL stadiums (Jets and Giants share Meadowlands) had a positive ROI base don the criteria you laid out.

Probably the same goes for the Olympics too.

The land taken up for the stadium and related infrastructure, the opportunity cost of not building other public works or taxable development, heck even day-to-day expenses like gameday security and traffic all point to a money loser.

But I have to point out, despite these pitfalls, cities compete heavily for franchises as it is a source of municipal pride. Walking around with Dallas Cowboys or Green Bay Packers swag is such an immense boost to a city, especially those cities that have seen better economic days (i.e. Pittsburgh or Detroit).

At 8:38 AM, Blogger Richard Layman said...

when you use that framework, depending on how much public money is involved, baseball and basketball/hockey have a better ROI, but it depends, e.g., Glendale AZ has lost tons of money on hockey. Probably hockey works less well in southern climes, but hey, Nashville proves you can't be doctrinaire about it, maybe even Anaheim too.

Football never really pays, because the stadium is empty about 50 weeks/year. In LA, the NFL thinks that will be different because of the complex including a sports exhibit extravaganza being built around the stadium.

Interestingly, now sports businesspeople are relying on the ancillary development around a facility as part of the total revenue package to support the team.

I should have mentioned that in the piece, e.g., this article is pretty amazing, about all the revenue streams being developed for the Golden State Warriors

2. The pride thing, sure. Don't know how to quantify it, but it is true, it's an equivalent of the "social bridge" that can happen in public places between people who don't otherwise know each other.

But in general, a metropolitan area doesn't pay that -- unless the state gets involved -- a specific jurisdiction does, and it's hard to justify.

I also didn't write wrt the Redskins in this particular piece, but I have made the argument in the past, that what you're really doing in these stadium agreements is creating partnerships (yep, the same 3P 'public private partnership' that the private sector touts) but they are incredibly one sided and not real partnerships because the power is asymmetric and weighted in favor of the team owner.

Anyway, like with Trump and golf courses or the Old Post Office, a jurisdiction needs to think long and hard about who they select because they are partners as a result, for decades.

Anyway, wrt Redskins, it's such a s* show, I don't think it's worth creating such a partnership for a city. It's not like the team is capable of turning around, given the track record of the current ownership.

So not only do you tie up a lot of land and opportunity cost, and unlike PG or Loudoun Counties, DC doesn't have all that much land to waste, you become part of the chaos.

If it were another ownership group, maybe it'd be a different story.

But again, the ROI is so bad, public money shouldn't be spent...

With Nationals Stadium, just like with MCI Arena and the East End (even though I argued against it for a long long time) a credible argument can be made that it helped to strengthen and extend the development of the SE Waterfront, and even contributed to the climate of support for development on the waterfront in SW, to the point where the overall contribution to local economic development is significantly positive.

You can't get that with a football stadium at RFK Campus, there are limited redevelopment opportunities.

... but as importantly, name a football stadium in the US where the area around it is decent, even if the stadium wasn't a significant driver of the change.

I have to admit I haven't seen a lot of football stadiums, but enough in my time, and the only one that I can think of that is in a decent area is the stadium for the Pittsburgh Steelers, which is adjacent to the baseball stadium and a casino as well.

The NY teams?, Philadelphia?, Baltimore? Atlanta? umm, no.

At 8:46 AM, Blogger Richard Layman said...

These paragraphs in the SF Business Times really stuck out for me:

But the long-term success of the Warriors franchise is rooted deep in the bay mud of San Francisco’s Mission Bay district, where the team is building the new Chase Center. It is scheduled to be completed in time for the tipoff of the season in October 2019.

It’s a game-changer. From paying rent to play at publicly owned Oracle Arena, at Chase the Warriors will control all revenue and have the final say on operations, technology and concessions.

High-end suites in the new arena are priced at up to $2.25 million. On top of that, roughly half of the arena’s 12,000 season tickets will carry a 30-year “membership fee,” half of them above $15,000 and half below. The fee is refunded at the end of the 30 years, so the team will effectively be borrowing money at zero interest from thousands of its fans.

The Warriors will also have the ability to book concerts, conventions and other sporting events. The NCAA Men’s Basketball Championship’s West Regionals already are scheduled for March 2022.

At 9:12 AM, Blogger Richard Layman said...

other interesting articles about outstanding debt left on vacated arenas and stadiums in Oakland.

Oakland officials are quoted suggesting that since the NFL offered to pay $100 million towards a stadium had the Raiders stayed, they should still pay that towards to the outstanding debt on the stadium that will remain after the Raiders leave.

It's a reasonable argument to make that since a team has to pay a massive relocation fee (around $600MM) shouldn't the localities have some claim on that since they're the ones getting screwed?

this about the ec. benefit from a new baseball stadium in Oakland.

The thing is, Oakland vis a vis the rest of the region, needs a big pop. Could a stadium provide that kind of velocity for change and real estate development?

At 11:25 AM, Blogger Richard Layman said...

competing proposals for an arena in Seattle. One basketball focused, the other a redevelopment of the existing arena, focused on concerts and then, hockey, comparable to the deal in Las Vegas.

Why NBA doesn't want to share an arena (unless both teams share ownership):

"“A venue with an NHL partner and a music partner and an NBA partner is inherently going to lead to issues with how to divvy up the pie,” he says. It will need so many revenue streams to retire the construction debt on a building and land it doesn’t own, Hansen points out, that any NBA team owner will find the proposition financially unattractive — no matter how cool Seattle seems to be.

NBA franchises have become so expensive — the Houston Rockets were sold during the summer for $2.2 billion — that a relocating owner or the owner of an expansion team is unlikely to want to be a second-tier renter in a building it can’t exploit financially. While 10 cities have arenas that house both NHL and NBA franchises, most are privately owned and operated. The trend in each sport is for each team to develop its own building, which can be collateralized to fund projects that that specifically appeal to their fan bases and players."

At 11:27 AM, Blogger Richard Layman said...

Different aspect, more on teams which is different from "sports tourism." This is a piece from the San Diego Union Tribune about the impact of the loss of the Chargers.

Obviously, sports bars and such lost business, and other businesses close to the stadium.

But as economists would argue, at the metropolitan scale people spend the same amount of money elsewhere. Although there are still winners and losers.

At 6:13 PM, Blogger Richard Layman said...

Richmond Times-Dispatch has a piece on youth-oriented sports complexes and sports tourism.


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