For decades the “coin of the realm” was that a public sector investment in an arena, ballpark, or stadium to attract or retain a professional team was a very poor decision. Many, including me, even described some of the investments made by mayors, county officials, or governors who chased professional sports teams as nothing more than corporate welfare. What changed in the 15 years since I published Major League Losers? The Real Cost of Sports and Who’s Paying For It? Why do I now argue that an arena, ballpark, or stadium can reverse urban decline?
In response to the first question – What changed? – I remind team owners, public officials, and my colleagues and students that the decentralization of economic activity in every urban region has so dramatically accelerated across the past few several decades that the financial viability of many central cities is threatened. As higher income people and businesses locate away from central cities and live and work in suburban and exurban communities, a level of economic segregation takes place that weakens the fiscal base of central cities. Simply put, and as noted by many, as people and businesses relocate, central cities become less attractive and the human capital needed to enhance a city concentrates in other parts of a region. Most central cities losing businesses and people to suburban areas cannot change their boundaries to capture lost taxes. The weakening of central cities tax bases would not be a problem if suburban cities, nearby counties, the state, or the Federal government agreed to share more of their revenues with central cities. Alas, they do not.
So, how does a city attract or deflect regional economic activity back into its taxing borders? What activity attracts a large number of visitors each and every year and is also an activity that suburban cities cannot duplicate or also offer? The answer to that question is professional sports; let me explain.
Cities tried festival marketplaces as a way to bring economic activity back into central cities long after the classical downtown department stores had closed their doors. But those efforts were easily duplicated by suburban cities. Some central cities tried to popularize their downtown areas without changing the mix of amenities, but those efforts were also duplicated as suburban cities built or renovated their own town centers and built life-style retail centers that offered an antiseptic if “faux downtown.” In this midst of all of these dynamic changes what asset continues to attract people and cannot be duplicated? The answer is professional sports.
A ballpark hosting a Major League Baseball team will attract (in most instances) more than 2 million visits to the area, and possibly 3 million. An arena can be expected to generate more than 1.5 million visits if is home to either a National Basketball Association or National Hockey League team (or both). The challenge for cities is then summarized by this task. If you knew there would be several or more than a million visits each year to a specific part of a downtown area, how would you redevelop the surrounding real estate to (1) benefit the team, (2) the facility’s owner and operator, and (3) the city? Sport is an extremely valuable tool and if a city uses it properly and builds a new neighborhood anchored to a facilty, sport can indeed lead to urban revitalization and the relocation of regional economic activity.
And to the second question I respond, no, I am not being audacious in noting that sports can be an effective tool for urban revitalization.
Major league sports are very popular and have the ability to reposition regional economic activity. The four (or five if you include soccer) major sports leagues will ensure that in the vast majority of markets there will be only one team from each sport. The exceptions are anomalies linked to the amalgamation of competing leagues and that means that in most metropolitan areas there will be but one basketball, baseball, football, hockey, or soccer team. What is unacceptable is for leadership in cities to fail to appreciate and how to use the popularity of sports to recentralize economic activity. And what works for larger cities and regions can also work in communities where minor league teams or collegiate sports are also popular.
Does this theory work? Can sports really enhance a downtown area and generate a positive economic gain for a city? The lessons learned in Columbus, San Diego, Los Angeles, Indianapolis, Denver, Edmonton, Cleveland, Louisville, and elsewhere have shown that an arena, ballpark, or stadium – if built as part of an integrated neighborhood unifying private and public investments – can indeed generate real economic gains and new tax revenues for cities. Together with my colleagues at the Center for Sport and Policy, we can make an arena, ballpark, or stadium work for your team and city.