By: Erin Talkington, Vice President, RCLCO
Dialogue around the impact of stadiums has become too binary, which is an unfair framework. Sports venues are emerging as the anchor to a series of public investments, which form a broad backbone of neighborhood regeneration. Yet the conversation in many regions still focuses solely on how to quantify the incremental local tax and revenue generated from the stadium itself, which doesn’t provide a complete understanding of the cost-benefit.
The questions Atlanta should really be asking are:
- How much private investment will the public investment leverage?
- What’s the impact of an entirely exciting new neighborhood or team?
- Who benefits and who is potentially disadvantaged by a new stadium or new location?
- And perhaps most importantly: What additional investments should be made to maximize the value of its new asset?
The Nationals Ballpark in Washington, D.C. offers a case study for why tax value alone is a wrong analysis. Yes, the District developed a creative bond-financing package that, by most estimates, will be paid off ten years ahead of schedule due to revenues from the ballpark. But the ballpark, along with other investment in parks, trails, transit, and affordable housing, have combined to leverage billions of dollars in private investments that created a whole new neighborhood on former parking lots and excess federal property. Beyond investment and additional housing, the neighborhood has helped make D.C. price-competitive against its suburban neighbors, reintroduced residents to their riverfront, and created a unifying experience for citizens across the region to cheer on their sports team.
Looking at projects across the country, we recognize three key factors that take sports venues from “nice to have” to meaningful economic and community impact and private investment:
- Upfront planning – just because there is potential nearby doesn’t mean it will happen on its own. Planning has to extend beyond a sports/entertainment facility to adjacent land and infrastructure.
- Thoughtful consideration of neighborhood benefits and risks (integration, connection, identity) – access, surrounding uses, programming, timing/frequency of use, traffic/transportation, existing residents/businesses
- Pragmatic yet aspirational assessment of local market potential: timing, scale, value, density
It’s hard to ask the reverse question, which is what would it mean for Columbus to lose its soccer team, or for Atlanta not to have the Braves? St. Louis and San Diego are already grappling with this question, and the public outcry over losing a beloved team suggests that, while the investment in a new venue needs to measure dollars and cents, the civic identity that can be driven by a beloved sports team extends beyond a dollar value.
Other public investments can offer a similar civic identity and catalytic potential to sports venues. The economic development conversation has re-focused on quality of life amenities, such as parks and trails, entertainment districts, and multimodal transit. Cities believe these amenities will attract potential residents and employers, and incentivize them to make their region a long-term home.
Atlanta is certainly familiar with this potential, as the Beltline trail can already be measured in terms of the significant real estate investment that has occurred nearby. It is frequently promoted as a key benefit to locating in Atlanta and an appealing destination for visitors. But perhaps most importantly, the Beltline has repositioned Atlanta as a healthy place, an environmental place, and one with an excellent urban realm. I look forward to when we can demonstrate the value of stadiums and public investments beyond the tax dollar return.
Erin Talkington is a Vice President with RCLCO in their urban development and public strategies groups. She works across the country for developers, landowners, and cities to provide strategic market analysis that guides development and planning decisions.
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