Stadiums and arenas redux: Mayor Bowser still wants the area NFL team to relocate to DC

DC and the Redskins. The Washington Business Journal reports that Mayor Bowser hasn't given up on a football team and stadium ("Bowser pledges to continue fight to bring NFL back to D.C.").

I am skeptical for many reasons, including the horrendous management of that particular team. If you're going to be in a multi-decade deal with a sports team "as a partner" risk management concerns mean you ought to be vetting the counter-party. The Redskins management would be bad partners.

-- "Brief follow up on DC and a new football stadium for the Redskins," 2018
-- "Yes, modify and extend the RFK Campus lease; No, don't do it for the Washington Redskins football team," 2018

But mostly my skepticism has to do with the fact that football stadiums in particular have never been associated with positive spillover economic development, because they are big, generally surrounded by parking lots, and have events less than 10% of the time.

Rendering of the mixed use sports and entertainment complex for the Los Angeles Rams and Chargers football teams.

The NFL believes that the plans for the new football stadium "in Los Angeles" (actually in Inglewood) will be the exception, because it is part of a larger mixed use development including retail, housing, office, and other entertainment options and attractions ("Design for a future Washington Redskins football stadium to be featured on "60 Minutes" tv show," 2016).

But we won't know for some time whether or not that ends up being true.

Dedicating a fair amount of public land and resources for a professional football team is risky and an encubrance in terms of foregoing other opportunities with greater economic return.

Plus, why give the football team owner the privilege of being the preferred developer instead of putting such an opportunity out to bid?

Advocates mostly fight sports teams projects to no avail.  For years, I agitated against deals for stadiums and arenas, based on the research that generally finds there isn't a positive economic impact from them.

The problem with those studies are they generally look at data at the metropolitan scale, where it all washes out.

The reality is complex and nuanced.

While it's likely that such deals aren't great for the local governments involved, with such deals being particularly bad for some communities like Glendale, Arizona ("Albatross of Debt Weighs on Super Bowl City," New York Times), the reality is that "badder" deals can be made better based on "forcing" certain ways of building, integrating, programming, and managing the facility that are pro-urban.

This Orange County Register article, "Stadium maintenance, debt eat into Anaheim's revenue from hosting Angels baseball," reports that over the last 20 years, the City of Anaheim has netted less than $1 million in total from their rent agreement with the Angels baseball team, after costs for maintenance and improvements have been subtracted. From the article:

Angel Stadium has been an expensive asset that has yielded little profit for Anaheim over the past two decades, according to recently released city data.

Some residents and city leaders see upcoming lease negotiations with Angels owner Arte Moreno – expected in October – as a chance to try to change that.

Points of discussion may include what cut Anaheim should get of ticket sales, parking and other events; how to develop city-owned land around the stadium; and whether to renovate the 53-year-old ballpark or build a new one, and who would pay for it. ...

The area around Angels Stadium, including the Honda Arena, where the Anaheim Ducks hockey team play, is called the Platinum Triangle. 

Looking back, city figures show that although Anaheim collected revenue of at least $1 million annually for 16 of the 22 years from fiscal 1997-98 to 2018-19, after it chipped into a stadium improvement fund and paid down debt, the remaining profit for all those years was $626,046.

That doesn’t include sales tax on purchases of stadium food and team merchandise as well as “ancillary” tax revenue from area restaurants and stores that benefit when fans flood the city on game days.

In the Platinum Triangle – a larger area that includes the stadium, the Honda Center and numerous restaurants and other businesses – the city’s sales tax receipts have topped $5 million annually since 2014.

“Baseball brings a lot of benefit to Anaheim that goes beyond the numbers we may see in any given look at the finances of the stadium,” city spokesman Mike Lyster said, adding that Anaheim collects “a substantial amount of revenue” from the stadium and ancillary taxes.

The city’s economy is built on a visitor-serving whole that’s greater than the sum of its parts, Lyster said – for example, since the Angels put Japanese national Shohei Ohtani on the roster, the city has seen an influx of fans from his home country, some of whom also visit Disneyland and other local attractions.

The article makes the important point that while the city loses in terms of the specific deal with the team and the stadium, likely they make up for it in increased tax revenues derived from other business activities supported by the stadium.

Using similar arguments about the increase in city tax revenues derived from adjacent development Washington Post editor Marc Fisher argues that the Washington Nationals stadium has been key to the redevelopment of the Capitol Riverfront in Southeast ("Ballpark Boomtown"), and even I must concede that it's an important anchor and neighborhood landmark that has made a difference.  The article has great before and after photos too.

Development history, Navy Yard/Capitol Riverfront.  Washington Post graphic.

Similarly, I also had to concede that the redevelopment of Downtown DC's East End has been accelerated by the addition of what is now called Capital One Arena, even if a goodly amount of the development there would have come about eventually, as the build out capacity elsewhere in Downtown became exhausted.

It's not simply a question of urban versus suburban: but urban design and the transportation system that serves the facility.  Just because a stadium or arena is built in a city doesn't mean that it will be built in a manner that supports urbanism.  There are both good and bad examples, and the bad examples, such as the White Sox baseball stadium in Chicago, prove the general point.  In Chicago, it's particularly ironic, because Wrigley Field is the archetype of what works.

A major element is automobile-dependent vs. transit-dependent in how people get to the facility, which is illustrated by these two different photos from the San Francisco area.

Oakland Coliseum surrounded by cars (Oakland Tribune photo).


People using the Muni transit system to get to PacBell Park in San Francisco (SF Chronicle photo).


But New York City is the national leader on this dimension, as a majority of people attending events at Madison Square Garden and Barclays Arena use transit.  For the New York Yankees it's about 45% and probably about 38% for the New York Mets,  ("More Fans Look to Take Transit to See Yankees than Mets," WNYC/NPR).

Rather than reflexively oppose, it's absolutely necessary to focus on getting the best possible deal (set of benefits) for the local government as counter-party.  It's important to focus on this, because advocates can argue against deals til we're blue in the face, but the sports teams generally will get what they want, unless local or state laws require referendums to approve the deals.

For example, as a condition of the deal, DC should have required the Washington Nationals to pay for extra transit service when required ("Metro will stay open late for the rest of the Nationals and Mystics’ postseason games," Post), although a Post commenter makes the good point that likely Major League Baseball fights all such attempts in order to prevent a precedent being set for other teams.

I've written a bunch of pieces on this, and continue to modify the framework, which is derived from these pieces:

-- "Stadiums and economic effects," 2013
-- "An arena subsidy project I'd probably favor: Sacramento," 2014
-- "Sports stadiums (and arenas) and local economic development and a DC soccer stadium,"2014
-- "Stadiums and arenas as the enabling infrastructure for "money-making" platforms ," 2014
-- "More sports: sports-anchored entertainment districts and LA Live

Note that some communities provide tax-based support to college facilities, e.g., for Baylor in Waco, Texas ("Funding Sources Differ For Baylor and A&M Stadiums," KBTX-TV).

And now "sports books" gambling has been legalized it can be another source of revenue primarily to the operator, but also through taxes to the local and state governments ("Monumental to open multi-floor sports book at Capital One Arena," Washington Business Journal).

Characteristics that support successful ancillary development associated with professional sports facilities: 

Urban Design and Development

• a publicly produced and robust master plan which isn't a "bag job" produced by sports team interests;
• 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;
• ownership split concerning ancillary development: is it all controlled by the team?

Programming

• 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 basketball, hockey, and one college basketball team for more than 100 sports events each year (until recently it also hosted professional women's basketball);
• 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; 

Transportation

• 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. 
• transit capacity: subway transit has much greater capacity than light rail, and depending on the schedule, railroad passenger service.  Buses have less capacity too, but depending on the nature of the event, many can be deployed.  
• transportation demand management requirements: some teams have TDM plan requirements, in particular the Chicago Cubs, most don't. Some teams provide a great deal of information or support for sustainable mobility, most don't.  Some teams pay for transit services (Pittsburgh Steelers and Pittsburgh Stadium Authority pay part of the cost of free transit to the light rail stations serving their facilities, called the North Shore Connector), at least some of the time (the Washington Wizards and Washington Capitals), most don't (Washington Nationals).
• parking taxes to support community improvements: years ago a neighborhood association in the Hill District of Pittsburgh suggested creating a parking tax that would go towards funding local community projects as a mitigation program ("A dollar a car for the Hill," Hill District Consensus Group)
• locating stadiums and arenas in high-capacity transit locations: e.g., Madison Square Garden, Barclays Center, and Capital One Arena are served by multiple transit lines, whereas most stadiums and arenas are sited in locations that have single line transit service.
• special marketing initiatives/other agreements with transit authorities:  For example, the transit authority in Salt Lake City treats tickets to sports events at the University of Utah as an all-day ticket. Some railroad lines provide special game day service for football games and other events.  While it wasn't put into practice, the transit authority in Sacramento proposed providing Sacramento Kings ticket holders with "free transit" in return for certain subsidies.

New York City's arenas and to some extent the baseball stadiums, the Capital One Arena in DC, Wrigley Field in Chicago, and PacBell Park in San Francisco are particularly noteworthy examples of sports facilities well connected by transit, where a majority of attendees get to and from the facility on transit.

As mentioned, some sports teams (and other groups) have paid towards transit stations, including the Pittsburgh Steelers, the Pittsburgh Stadium Authority (but not the Pirates baseball team directly), the New England Patriots ("Commuter rail service to Foxboro to start in October," Quincy Patriot-Ledger, and the New York Islanders ("Islanders arena project at Belmont Park now includes new LIRR station," Newsday).

Benefits to the locality/citizens

• fair lease terms rather than agreements where the team pays little or no rent
• profit percentage paid to the local/state governments upon the sale of the team, in recognition of the importance of government funding for the facility and/or support infrastructure (like what was intended for the Miami Marlins stadium) as well as the reality that the facility is the platform for the success of the entire enterprise
• public facilities access and use program, such as how the basketball arena in Bilbao includes a recreation center open to the public, including access to the main court when not in use; while not on-site, the Redskins football team did pay towards a community and recreation center in the area of the stadium
• admissions taxes and receipts: Prince George's County would make almost zero off the Washington Redskins if it weren't for an admissions tax on each ticket; but many teams argue against imposing such taxes or that they should be the beneficiaries, e.g., the Washington Wizards used admissions tax receipts to pay for interior improvements, "Verizon Center Ticket Tax to Rise to 10%," Washington Post, 2007.
  
• community benefits agreements that provide additional benefits to either the impacted neighborhood and/or the city as a whole.

For example, with regard to taxes, as a proto-state, DC keeps the sales, income, and property tax revenue streams associated with real estate development and appreciation and the spending and obligations of residents.  On the other hand, unlike other "states," DC is barred from taxing "day of game" income of professional athletes, a revenue stream enjoyed everywhere else.

Casinos as a product type to learn from.  I've noticed that like with stadium and arena deals, some casino deals are better than others.  Rarely, transportation demand management plans are required.  Sometimes there are good community benefits programs that provide grants etc. with processes that aren't subject to steering and other extranormal involvement by elected officials and special interests.

It's worth looking across the industry at various agreements in an attempt to codify a set of pro-community best practices in association of the development of these facilities.