Sports Facilities in the Camden Yards Era


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2006 thesis on sports facilities in the Camden Yards era, looking at when development has worked and when it has failed.

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Sports Facilities in the Camden Yards Era

  1. 1. Sports Facilities in the Camden Yards Era Mike Diegnan New York University
  2. 2. April 24, 2006 2
  3. 3. TABLE OF CONTENTS Table of Contents....................................................................................................................................3 Executive Summary.............................................................................................................4 Introduction..........................................................................................................................4 Methodology .......................................................................................................................8 The Opening of Camden Yards...........................................................................................8 The New Era of Stadium Construction................................................................................9 Reasons for New Stadium Construction............................................................................12 Reasons Against New Stadium Construction....................................................................19 Public Financing of Sports Facilities.................................................................................21 Recent Development: The Impact of Hurricane Katrina .................................................23 In-Depth Look: Arlington vs. San Diego..........................................................................23 Sports Facilities Analysis...................................................................................................26 Batter Up: Washington D.C...............................................................................................31 Conclusions........................................................................................................................32 Future Research..................................................................................................................34 Current Major League Baseball Ballparks........................................................................35 Current National Football League Stadiums.....................................................................39 Current National Basketball League Arenas.....................................................................44 Current National Hockey League Arenas..........................................................................49 Bibliography.......................................................................................................................52 Notes...................................................................................................................................57 3
  4. 4. EXECUTIVE SUMMARY Camden Yards’ construction in Baltimore helped set off a stadium building boom throughout North America. Fourteen years later, I take a look at its opening and examine how and why sports franchises and cities have tried to mimic Baltimore’s success with new facilities in urban settings and analyze the trend to predict the future of stadium construction and financing. INTRODUCTION On April 6, 1992, Rick Sutcliffe delivered the first pitch in the history of Oriole Park at Camden Yards. For many of the 44,568 fans on hand, it may have been like any ordinary April baseball game, offering its breath of opportunity for a new baseball season. Little did they know that not only had a new era in baseball history begun, but a new trend had been born: The stadium boom had officially begun. Baseball has forever been rich in its history and architecture. From the unique dimensions of the Polo Grounds to the ivy of Wrigley Field, from the green of Fenway Park to Monument Park at Yankee Stadium, baseball’s ballparks have always been as much of an attraction to fans as the game itself. Yet, the glory of these relics shifted as the sport weaved through the 20th century. Fenway and Wrigley stood nearly untouched throughout the century, but Yankee Stadium went under a massive renovation in the 1970s, while one by one, many of the greatest ballparks in baseball history were demolished: the Polo Grounds, Crosley Field, Shibe Park, Sportsman’s Park, Ebbets Field, all lost for future generations to be unable to enjoy. A touch of history was lost each time one was knocked down. Camden Yards is special because it unleashed new ideas in sports architecture, sports financing and hopes of revitalizing neighborhoods. Comparatively speaking, construction costs were on the lower side (approximately $110 million1), while the stadium provided the Baltimore Orioles with many new and incremental revenue streams. Now, “fans in suites could watch the game inside on television, eat finger sandwiches and drink Perrier. Club seat patrons could have microbrews delivered by waiters. Even ‘regular’ fans could stroll the Eutaw Street concourse or take their children to try their luck at speed pitch and other kid-friendly diversions.”2 4
  5. 5. The ballpark’s design married modern technology with classic features. Not only did it provide perfect angles to watch the game and offer a touch of baseball nostalgia, but fans could enjoy uncountable other activities and better food. Plus, it was a throwback to baseball history: Long forgotten was the large multi-purpose stadiums built in the ‘60s like Three Rivers in Pittsburgh and Veterans Stadium in Philadelphia; instead, the Baltimore Orioles and architecture firm HOK Sport had developed a retro ballpark that brought out the beauty of the famous ballparks in the early 1900s. “All across the nation in the ‘70s, people were building multipurpose stadiums, and most often they were circular, because that was the best compromise geometry for baseball and football. I think what the Orioles were effective in was saying, ‘This is baseball. It’s not football. The ballpark should be intimate.’ It should be a ballpark, that was one of (Orioles president) Larry (Lucchino)’s catchphrases. In fact, he wouldn’t let us say the word ‘stadium’ when we talked about this project.”3 -- Joe Spear, Senior VP, HOK Sport + Venue + Event & Architect responsible for designing Camden Yards As so often is done in sports and business, a successful venture was copied. Indeed, the look and plan of Camden Yards was immediately copied. Since Camden Yards’ grand opening 14 years ago, 15 more Major League Baseball franchises have opened the doors on a new ballpark, with the St. Louis Cardinals opening the newest facility on April 10. Another seven franchises are either in the development stage of a new ballpark or in the motions with their municipalities to fund one. With the exception of the Boston Red Sox’s Fenway Park and the Chicago Cubs’ Wrigley Field (two ballparks built in the early 1900s that are as big a draw as their franchises), the trend has been to build new. Yet baseball is not alone in its pursuit for new facilities (Table 1). When the Arizona Cardinals open their new stadium in September 2006, 17 of the NFL’s 32 teams will be playing in stadiums that have been christened since Camden Yards’ debut. Three others -- the Bears, Jaguars and Packers -- are playing in facilities that have undergone major facelifts during this period (each renovation costing at least $125 million). Ten more franchises are either in the development or planning stage for a new home. The league’s two remaining franchises are on 5
  6. 6. different paths: The Buffalo Bills are family-owned by 87-year-old Ralph Wilson and debating their future,4 while the Oakland Raiders have tabled talk of a new facility as they play out the remainder of their lease, which runs until 2010.5 In the NBA, the New Jersey Nets are finalizing contracts to build a new arena in Brooklyn, and the New York Knicks and Sacramento Kings are working on plans for new arenas. Meanwhile, in the 1990s, the NHL expanded from 21 to 30 teams and moved into new territories in the south. This trend helped 23 NHL franchises open a new facility since Camden Yards. Of the NHL franchises playing in arenas built prior to 1992, only the Detroit Red Wings do not have a new arena high on their wish list. TABLE 1 Facility Status for Franchises in the Four Major Sports Leagues* Sport Camden Major Approved Facility Satisfied with Yards Era Renovations (new or Sought Pre-Camden Facility Completed renovation) Facility 16a MLB 0 4 3b 7 NFL 17c 3 5 4 2 NBA/NHLd 9 0 1 1 0 NBA 10 e 0 0 3 5 NHL 14 0 0 4 1 Facilities 66 3 10 15 15 Teams 76 3 12 16 15 Sources: Baseball Almanac, Hockey Zone Plus, Hoops Corner, Sports Business Research Network, Sports Facility Reports, Stadium Guide, Stadiums of the NFL Breakdowns of each franchise are available in the Appendix. * Includes Camden Yards, which debuted in 1992. a The Florida Marlins, Minnesota Twins and Oakland Athletics are all co-tenants of multipurpose stadiums b with the Miami Dolphins, Minnesota Vikings and Oakland Raiders, respectively. The Marlins, Twins, Vikings and Athletics are seeking new facilities, while the Dolphins and Raiders are not. Includes the Arizona Cardinals’ new stadium, scheduled to open in September 2006. c Statistics of facilities with both an NBA and NHL tenant. The New Jersey Nets and New Jersey Devils d currently share a building, but both are in the process of building separate facilities and are listed individually within their league. New Orleans Arena opened in 1999. Due to Hurricane Wilma, the Hornets played most of the 2005-06 e season in Oklahoma City in the Ford Center, which opened in 2002. Only the New Orleans Arena is counted. 6
  7. 7. Camden Yards has had another impact, but this one has been felt beyond the boundaries of the playing field. The ballpark was one part of Baltimore’s larger redevelopment plan for the city. Baltimore’s ability to revitalize its downtown area through construction of Camden Yards (and other projects) helped spur a movement to bring sports back to urban centers, as cities began seeking sports facilities as catalysts for redevelopment. This paper will take a look into how Camden Yards changed the history of sports facility construction and community redevelopment and then helped lead to the creation of a new era of stadium financing that includes sports franchises receiving billions of dollars in subsidies from public officials for their creation. The specific points that are examined in this paper are: 1. The impact of Camden Yards, its role in the revitalization of Baltimore and its impact on sports in North America. 2. The reasons for the stadium boom of the 1990s and early 21st century. 3. The ability of sports facilities to spur economic development. 4. The role of public financing in sports facility construction and the use of public financing to lure teams to new cities or prevent franchises from moving. 5. Finally, the future of sports facility construction. While this study will provide a valuable look at the history as well as future of sports facility construction, it will be most useful for two groups: • Sports Franchises, which will be able to use this study to recognize trends in the marketplace and be better prepared to enter the stadium game. • Municipalities and elected officials, who will be able to learn the lessons from Baltimore and other cities to develop a similar path to help ignite development in their respective cities. 7
  8. 8. METHODOLOGY Various sources of information were used in the research. The information that was most critical for this study was accurate data on each facility (age, cost, public funding), each organization’s plans for a new facility, the economic impact of the facilities as well as the type of lease or ownership of the facility. Data was compiled from the financial rating companies (Moody’s, Fitch and Standard & Poors) and various sports research web sites. In addition, local newspapers and pro- and anti-stadium web sites provided up-to-the-minute updates on franchises’ discussions and plans for a new facility or relocation. In addition, I conducted one-on-one interviews with the different interested parties involved in stadium finance and construction. These subjects fell into each of the different categories: franchises, public stadium opponents, municipality officials and architects. These individuals are the ones making the deals and/or seeking new facilities. Their insight was crucial to understanding the needs for a new sports facility (if that is the case), the financing options and their predictions for the future of sports facility construction. THE OPENING OF CAMDEN YARDS William D. Schaefer, the mayor of Baltimore from 1971-87, never forgot one of his most disappointing days running the city: when the Baltimore Colts left in the middle of the night with their equipment packed in Mayflower Trucks for Indianapolis in March 1984.6 It was hard on his city and hard on his citizens. When he became governor of Maryland in 1987, his passion for the city of Baltimore did not waver. He vowed not to let the Orioles leave the city during his watch,7 even as the city was in the midst of a tense lease negotiation with the franchise. If the Orioles followed the Colts out of town, some commentators predicted Baltimore would move back “to being recognized only as the toilet stop on the drive between Washington, D.C., and Philadelphia.”8 8
  9. 9. Janet Marie Smith, an urban planner who worked on the Camden Yards project for he Orioles and whose vast experience includes Los Angeles’ Pershing Square and New York City’s Battery Park, agreed with Schaefer’s vision, “Schaefer’s rationale for the city was that without a strong downtown that people would frequent, the city would die. Urban planners talking about urbanism.”9 Camden Yards was one piece of the city’s revitalization. Said Smith “They had a governor who picked a site that was downtown because he cared about the city. He understood intuitively that if you built in an urban setting, you could use the infrastructure that was already in place to bring another three million people downtown, advancing the downtown agenda, populating hotels, restaurants and the convention center.”10 Prior to Camden Yards’ construction, Baltimore had invested hundreds of millions of dollars for a light rail system into downtown,11 added commuter trains from Washington, D.C.,12 built a world- class aquarium in the Inner Harbor13 and created a vision for more infrastructure improvements. As Thomas A. Dorsey, director of credit management and senior vice president in the underwriting department at Ambac Indemnity Corporation said in 1996, “Twenty years ago, Baltimore was viewed as a city with a run-down urban core and financial problems. Today it's a double-A (rated) city with a major sports facility, a brand-new convention center, a light-rail system that runs through the center of the city right up to Camden Yards, a completely renovated harbor with an aquarium and a science center, probably eight major hotels around the harbor, and shopping malls.”14 As will be discussed later, cities looked to copy Baltimore’s strategy and soon sought stadiums to enhance entertainment districts in downtown areas. Said Smith, “It set a standard in 1992 that convinced many baseball purists and city economists alike that urban parks had a place in the revitalization of American cities.”15 THE NEW ERA OF STADIUM CONSTRUCTION Camden Yards set in motion the move towards new sports facilities. It made the Orioles the envy of sports franchises throughout America. While Camden Yards may not have 9
  10. 10. created new ideas in sports, it brought everything together. From Pilot Field in Buffalo, (a Triple-A baseball stadium created by HOK Sports, the same architecture firm for Camden Yards), the Orioles copied Pilot Field’s red brick, retro look and downtown location, breaking the mold of suburban stadiums that was popular in the 1970s and ‘80s.16 From Miami’s Pro Player Stadium, the Orioles were able to utilize new ideas of premium seating, bringing new riches to franchise owners.17 Camden Yards combined those strategies and did it best. Said Smith, “I can’t say we broke the mold on any new one item, but what Camden Yards did was the sheer composition of the entire product.”18 Within years, ballparks with club seats and luxury suites were being constructed around the country. In 2006, 79 of the 122 teams in the four major sports leagues in North America will be playing in 69 facilities built or renovated extensively since 1992.19 (Table 2) Another 28 organizations are in the planning process or seeking funding for a new facility.20 TABLE 2 Year-by-Year Openings of Facilities Since 1992 14 12 10 # of Facilities 8 6 4 2 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 MLB NFL NBA/NHL NBA NHL Sources: Baseball Almanac, Hockey Zone Plus, Hoops Corner, Sports Facility Reports, Stadium Guide, Stadiums of the NFL. 10
  11. 11. Starting with Camden Yards’ opening in April 1992, the financial investment on the sports facilities built or undergoing major renovations over the last 14 years has totaled more than $18 billion (Table 3), of which more than $10 billion was from public-sector funding.21 TABLE 3 Sports Facility and Investment (1992-2006) Total Investment ($ Millions) 3000 2500 2000 1500 1000 500 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 *Based on year of opening MLB NFL NBA/NHL NBA NHL Source: Sports Facility Reports, June 25, 2005 One aspect of the opening of new facilities eliminated was the use of multi-sport facilities. Camden Yards provided the backdrop for baseball franchises to seek their own facilities. Said Smith, “it seemed to prove that baseball rightfully belonged in a ballpark built solely for the quirkiness of the sport, the only one without a clock or regulated field dimensions.”22 Soon, multi-sport facilities in nine cities were rendered obsolete and most have been demolished. Atlanta (Fulton County), Baltimore (Memorial), Cincinnati (Cinergy Field), Cleveland (Municipal), Houston (Astrodome), Philadelphia (Veterans), Pittsburgh (Three Rivers), St. Louis (Busch) and Seattle (Kingdome) have built 18 new sports stadiums to replace multi-purpose facilities. Meanwhile, in San Diego and San Francisco, the Padres and Giants, respectively, have built new ballparks, while their former co-tenants (Chargers and Giants) 11
  12. 12. remain at similar multi-purpose facilities and seeking a new stadium. Just three NFL and MLB teams share facilities today, in Miami, Oakland and Minnesota. And of the six teams playing in these facilities, only the Miami Dolphins and Oakland Raiders are looking to remain in their current home for an extended period of time. The era of multi-sport facilities is soon to be over. Tim Cahill, a Senior Project Designer for HNTB Architecture, said it was only a matter of time before the multi-purpose facilities had to be replaced. “They were finally realizing that combining the sports were hard to do. Football stadiums don’t work for baseball and vice versa. They did not have much to do with the city and the team. Baltimore is certainly one of the first that was a baseball stadium that was not a stadium, but a ballpark.”23 For Smith, it is more a matter of economics than the stadiums themselves. “All those parks built in the ‘60s and ‘70s did not have the suites, club seats and the premium seats that teams have come to rely on.”24 These are the revenues that teams have come to rely on and helped launch a stadium construction boom in the last two decades. REASONS FOR NEW STADIUM CONSTRUCTION Camden Yards set the tone for new facilities, and its opening set the stage for billions of dollars to be spent on their construction. In 2000, Paul M. Anderson wrote of the five main reasons a franchise seeks a new facility:25 1. “Obsolescence” -- It is more cost efficient to replace the facility than renovate it in order to generate the revenues to survive in professional sports today. 2. “Edifice” -- A new facility can become the focal point for community development by encouraging commercial and residential interests to relocate to the downtown area. 12
  13. 13. 3. “Expanding Attendance” -- A new facility will automatically increase attendance for a team based on the novelty and increased amenities for fans associated with the new facility. 4. “Competitive balance” -- New facilities are needed to provide teams with the revenue necessary to allow them to compete successfully in leagues experiencing significantly rising player and other costs. 5. “Increasing cost” -- As franchise fees and values rise, owners must have new facilities to realize revenue streams that will allow them to receive an attractive profit on their investment. These five reasons have been on display throughout the past 14 years and are still in use today; they simplify the reasons a franchise wanted a new facility. The key issues I focused on in my research are premium seating and the ability for teams to create new sources of income, economic development within an urban area, the use of public funds for a sports facility and the intangibles in such projects. PREMIUM SEATING Financial gains are at the forefront of many decisions, stadium financing notwithstanding. Teams push to build new stadiums because not only are work environments enhanced, but more importantly, the new stadiums bring in incremental streams of revenue, specifically through the introduction of premium seating. In the winter of 1994, NFL Commissioner Paul Tagliabue wrote in the Commissioner’s Report to NFL Executives, “As the Money survey indicated, in this increasingly competitive entertainment environment, fans expect first-class service in the form of stadium convenience, comfort, cleanliness and value.” Since Camden Yards opened, the NFL has been at the forefront of stadium construction and luxury seating, as Commissioner Tagliabue and his franchise owners recognized the need to treat fans with top-notch service. That is one explanation behind the rise in luxury suites and club seats in stadiums today. Bill Dorsey of the Association of Luxury Suite Directors explained, “Premium seating is in the financial 13
  14. 14. underpinning of the modern arena. It is largely responsible for this. Once that started happening, other teams had to do it in order to compete.”26 Joe Robbie helped expand the phenomenon of premium seating when he financed Joe Robbie Stadium (now Dolphins Stadium) with 10-year leases for executive suites and club seats when he built it in 1987.27 In the NFL, premium seating is not included in revenue sharing; instead, all revenue garnered remains with the franchise owner. Thus, every franchise has sought more and more luxury suites, party suites and club seats. In addition to having the NFL’s largest capacity, FedEx Field in Washington has 244 luxury suites and more than 15,000 club seats.28 The Arizona Cardinals will christen their $355 million stadium in September. Despite boasting just one winning record in the past 20 seasons, the stadium should have no problem selling out most of its 88 luxury suites and 7,400 club seats.29 It’s all about finding new ways to get new dollars, said HNTB’s Cahill. Cahill’s design projects include INVESCO Field at Mile High in Denver, which opened in 2001. He said, “The owners look for different ways to get new dollars. They need to make big money. They are all about money, how you are able to get a new take on premium suites -- suites, club seats, party suites, mini suites. Denver has two different clubs, plus an end zone club and a Mile High club.’30 The city of Houston recognized this need for premium seating. The Houston Oilers, who played in the AFL and then the NFL in the city from 1960-1996, left Texas for Tennessee in 1997 after receiving a much better opportunity to increase revenue. With the Astros and Rockets threatening to move as well, the city formed the Harris County-Houston Sports Authority, which has developed and constructed new facilities for the Astros, Rockets and Texans (an expansion NFL franchise to replace the Oilers) by 2003.31 The new facilities feature dozens of luxury suites and thousands of club seats, which they needed for their franchises to compete within their leagues, said Jerry Dinkins, the Director of Facilities for the sports authority. Dinkins said, “Owners of teams were looking for facilities that make money. Facilities that make money have suites because that’s where the money is made. They were looking for newer facilities that would generate more revenue.”32 14
  15. 15. The best example of the revenue disparity of new stadiums and old is displayed by the New York Giants and Jets. The teams play in the biggest market in the country, yet the teams rank 20th and 23rd, respectively, of the 32 teams in the NFL in operating revenue, according to Forbes.33 Their current stadium, Giants Stadium, does not provide the teams with the league- wide standard premium seating and the teams’ leases leave them behind their opponents on the field. After years of wrangling and a missed deal for the Jets in New York City, the Jets and Giants will move into a new facility together in 2010. Both clubs are projected to collect at least “$183 million in total revenue from a new, yet-to-be-named stadium,” 34 putting them in the top five in the NFL and bringing in more than double what they make at Giants Stadium. They’ll do this with 9,000 club seats (worth $30.8 million a year) and 200 luxury suites (worth $102.8 million a year).35 The deal with the state of New Jersey also includes the opportunity to “develop properties around the stadium which could generate more revenues.” 36 ECONOMIC DEVELOPMENT OF SURROUNDING NEIGHBORHOODS Although sports franchises have great financial incentives to build new stadiums, a lot of debate surrounds the decision to build them, specifically in regards to the issue of the economic impact on the city in which the stadium is built. Baltimore’s ability to redevelop the Inner Harbor and other areas of the city, while constructing Camden Yards and M&T Bank Stadium, helped create a path for many cities to follow. Cleveland (Jacobs Field), Denver (Coors Field) and Arlington, Texas (Arlington Stadium) all sought to revitalize neighborhoods with a sports facility as part of the plan with different degrees of success. As Alan Ehrenhalt wrote, “There’s good evidence -- even if it’s anecdotal rather than academic -- to suggest that professional sports can be critical to inner-city renewal if it’s part of a broader public plan. Anybody who walks up 16th Street in downtown Denver, past the restaurants and lofts of the revived LoDo district, and on to Coors Field at the end of the road, can’t help but see how commerce, architecture and sports have joined together in a web of successful redevelopment. Camden Yards in Baltimore and Jacobs Field in Cleveland 15
  16. 16. haven’t brought any form of salvation to their seriously troubled cities. But they have helped to reclaim parts of them by bringing in millions of visitors.”37 Many sports economists tout the inability of sports facilities of generating economic impacts on a city. As Andrew Zimbalist, a professor at Smith College and leading sports economist said, “Generally speaking, the independent research suggests that we can’t anticipate any economic impact” from sports teams and stadiums.38 Nonetheless, Zimbalist does support the New Jersey Nets’ plan to move to Brooklyn. He supports Nets owner Bruce Ratner’s $3.5 billion plan on the Atlantic Yards because of the extensive development Ratner has planned in Brooklyn. Zimbalist notes the Nets’ planned move is different than other sports facility deals because it is not a “standalone arena,” but instead “a 21-plus acre mixed-income residential and commercial community.” Ratner’s project plan includes 6,000 new apartments (minus 150 condemned ones). Zimbalist presumes, with the city’s housing shortage in New York City, Ratner would not have difficulty filling the units. He writes, “When all these units are built, I estimate that they will add additional gross income and sales tax receipts to New York City and New York State equal to $106.8 million annually and the present value in 2006 of this tax revenue stream over the subsequent thirty years equals $1,361.9 million.”39 Although Zimbalist is not supporting a sports facility as the sole economic driver in the redevelopment of a city, he does acknowledge that, as a piece of a larger plan, it can be successful. A further example of this is that it is unlikely Ratner would pursue such a large development without the Nets and the arena plan combined with the other development pieces. Thus, with Ratner using an arena as an anchor for his plan, Zimbalist is supporting the theory that sports facilities can, in fact, be an economic force in a region. Likewise, Houston has been very happy with the results of its deals that built Reliant Stadium, Minute Maid Park and the Toyota Center. As Dinkins said, “All the naysayers that said this would not work -- they are just about getting on the bandwagon and saying it is a good idea. I don’t think in politics -- and this is politics -- you can ever say everyone is happy. There are going to be people who don’t like what you are doing. There are people with good 16
  17. 17. intentions and they are saying what they think and that is what they believe. Overall, people will look and say it was a success.”40 STADIUM INTANGIBLES: CIVIC PRIDE Kenneth Shropshire wrote in the Sports Franchise Game, “… the function of a local government, as opposed to that of a money manager, is to pursue goals such as building civic pride, and encouraging indirect economic development. Generally, the duty of local government is to make decisions and take actions which serve the best interests of the citizens.”41 As earlier stated, Maryland Governor Schaefer was adamant about creating a plan to revitalize Baltimore, just as he was that the Orioles not follow the Colts out of his beloved city. He was passionate about that, just as many residents are passionate about their favorite teams. As sports industry consultant Rick Horrow stated in his book, When the Game is On the Line, sports teams are a critical component of city living. This intangible factor is one more reason sports teams have been building new facilities. Baltimore feared being a “toilet-stop city.” St. Louis wanted to be “major league.” That’s why it offered a $700 million subsidy to attract the NFL Rams and avoid being “a cow town,” as one civic official stated.42 The Minnesota Twins are using this approach as they attempt again to get approval for a publicly-financed, baseball-only facility that would allow them to leave the Hubert Humphrey Metrodome, their home for the past 24 years, but is more a football facility for the Minnesota Vikings and the University of Minnesota than it is a baseball ballpark. Mike Opat, a commissioner in Hennepin County, Minn., and sponsor of Twins funding proposal, is now pushing the qualitative benefit for the franchise, one that was almost contracted from Major League Baseball a few years ago. Opat said, “I can’t put a dollar value on the number of seniors or young people who follow the team. There are just a host of intangibles.43 This type of intangible gives franchises the ability to make threats to leave. It also illustrates why cities have continually bent over backwards to entice teams to come to their 17
  18. 18. city. As Mulugetta Birra, executive director of Pittsburgh’s Urban Redevelopment Authority said, “If the Steelers ever left town, elected officials would be hung.”44 The other issue is the other cities willing to invest in a city’s team, said Pittsburgh city councilman Dan Onorato, who was a member of the city’s Stadium Authority: “We have two options. Either get involved and commit significant amounts of public money, or no public money and say goodbye to your teams. Because there are at least five cities that will do it if we don’t.”45 Writes Robert A. Baade, “Numerous cities, for example, when confronted with a choice between losing their franchise and building a new stadium have chosen the latter.”46 That tactic of threats has worked. Neil deMause, who is the co-author of Field of Schemes and runs a web site of the same name, recently listed the franchises that have either moved or threatened to do so if a new facility was not built for them since 2000.47 His tally counted three franchises that have moved: Charlotte Hornets (to New Orleans, and temporarily to Oklahoma City), the Montreal Expos (to Washington, D.C.) and the Vancouver Grizzlies (to Memphis). deMause estimated twelve franchises have publicly threatened to relocate without a new facility: Buffalo Sabres, Florida Marlins, Indianapolis Colts, Kansas City Chiefs, Minnesota Vikings, Minnesota Twins, New Orleans Saints, Oakland A’s, Pittsburgh Penguins, Sacramento Kings, San Diego Chargers and Seattle Sonics. Of the twelve, some have already succeeded. The Colts have a new facility agreed to with the city of Indianapolis48 and the Chiefs have received approval for major renovations on Arrowhead Stadium.49 Meanwhile, the Saints are prepared to return to New Orleans and play in the Superdome in 2006 in a refurbished stadium that needed major repairs after Hurricane Katrina. Their future beyond 2006 is still up in the air, however.50 Other cities may have to make a choice soon. Bexar County, which incorporates San Antonio, Texas, has offered to extend hotel and rental-car taxes to pay $200 million to build a $310 million stadium for the Florida Marlins to entice the Marlins to leave south Florida for Texas.51 Meanwhile, Oakland Athletics owner Lew Wilff has flirted with moving his franchise to Fremont, located less than 20 miles outside San Jose. The plan intrigues Fremont 18
  19. 19. councilman Dominic Dutra, who said, “It would be an incredible opportunity. It could accommodate not just a new stadium but also a beautiful residential, retail, mixed-use village.”52 The nation’s mayors recognized this problem of franchises threatening to relocate in January 1996 and conducted a summit meeting in Cleveland to discuss it.53 “At the time of the meeting, Cincinnati, Seattle and Tampa were all facing the threat of losing their National Football League teams. The Chicago Bears were making noises about leaving their historic home for Gary, Indiana. The New York Yankees were considering a move to New Jersey, where the world champion New Jersey Devils hockey team had only recently pondered a move to Nashville, which was also in the midst of trying to lure the NFL’s Houston Oilers.”54 Fast forward ten years and each franchise succeeded in one way or another. Nearly $2 billion was spent to build stadiums for five teams in Cincinnati, Seattle and Tampa Bay (with more than 85% of it with public funds).55 The Chicago Bears stayed in Chicago, following a $611 million renovation.56 The New York Yankees are staying in the Bronx, but only after making a deal with New York City to move local parks so they can build an $800 million ballpark to open in 2009.57 The New Jersey Devils are not headed to Nashville (which did score an expansion hockey franchise as well as the Oilers from Houston). Instead, the Devils are scheduled to move into a new facility in Newark in 2007.58 REASONS AGAINST NEW STADIUM CONSTRUCTION Building a sports facility is not an easy proposition. Tensions rose throughout New York City when the Jets fought for approval for a facility on the west side of Manhattan, the final parcel of undeveloped land in the borough. The Jets were defeated by an anti-stadium debate, but they are far from being alone in failed attempts at a new stadium. Numerous web sites, including, and, exist to block attempts at franchises to get support for a facility. And very few sports economists have supported their claims. Their biggest argument is that a new sports facility is unable to increase economic growth in a city. Most sports economists tout these seven reasons to fight support for a new facility:59 19
  20. 20. 1. Substitution Effects: This theory is that no “new money” is generated by a facility. Instead, most people have a limited amount of disposable income to spend on entertainment and that spending at new sports facilities is only redirected from the local economy onto the facility. “When a new stadium goes up in any city, you can see for yourself, even if you’re a lay person, that there’s not much going on there except on game days,” said Villanova University’s Rick Eckstein.60 2. Leakages in the Economy: This theory is that most revenues at sports facilities go to franchise owners and players, who do not spend most of their money locally. 3. Small Piece of the Pie: Sports franchises generate a minor portion of a municipality’s annual economy. 4. Lack of Quality New Jobs. Construction of a new facility will generate many job opportunities, from the short-term (construction work for up to two years) to the long-term (service-oriented positions at the facility). Nonetheless, most new jobs are low-paying and seasonal, rather than higher-paying positions that could better influence the local economy. Roger Noll determined that “the average cost per job created by Camden Yards was $125,000, whereas for the city’s other urban redevelopment programs it was $6,000 per job.”61 5. Hidden Costs. Many new sports facility projects include infrastructure improvements that could add millions of dollars to the municipality’s role in the deal. The Yankees’ deal with New York City includes an agreement that will leave city and state taxpayers covering “infrastructure, parking, transportation and parks costs that could easily reach or even exceed $400 million.”62 6. Opportunity Costs. By building a sports facility, a municipality is making a capital expense that could take away from other projects. 7. Flow of Facility Revenues. Although sports facilities likely could generate sufficient revenue to cover their debt payments, much of this revenue flows to the team owners and players rather than to the municipalities paying for the facility. 20
  21. 21. As demonstrated by the number of sports facilities opened in urban areas in the past 15 years, sports economists have had difficulty winning converts to their theories. PUBLIC FINANCING OF SPORTS FACILITIES Sports franchises have used luxury seating and more and more amenities around their facilities to provide fans with newer and more enjoyable ways to watch sporting events. Likewise, sports facilities have in many cities helped revitalize local neighborhoods. In turn, sports franchise owners have sought public-private partnerships for the construction of these facilities with their municipalities. Public-private partnerships for the construction of sports facilities is not new, but as the facilities have gotten more expensive and team owners wealthier, the opposition for such projects has become much more vocal. Robert A. Baade, a critic of public-private funding for sports facilities, blames some of the public-private funding plans on the presidency of Ronald Reagan. Baade states that Reagan cut federal support of local governments, forcing “local governments to become more creative and enterprising in dealing with their financial crises that cut on both the revenue and cost sides.”63 One creative revenue stream cities began using to encourage development was sports facilities. Rick Horrow, who has worked on stadium and arena deals in more than 22 cities, presents five justifications he makes as to why a municipality should help pay for a new facility:64 1. The facilities generate substantial economic impact during construction. 2. They also generate substantial retail, sales and development activity surrounding the facility. 3. Major and special events are attracted to a new facility -- Super Bowls and the like. Recent Super Bowls in New Orleans, Atlanta and Miami have each generated over $250 million to the respective local economies. 21
  22. 22. 4. Regions recognize the intangible impact of a sports franchise and corresponding facility on its marketability and potential to attract businesses and new residents. 5. Although more difficult to quantify, franchise and facilities, many community leaders believe, are critical components of image enhancement and community pride. There are signs that some cities are no longer willing to take the risk, however, in building a sports facility with public funds. Portland, Oregon, was one of the rumored locations for the Montreal Expos before they moved to Washington in 2005. With franchises like the Florida Marlins, Minnesota Twins and Oakland A’s still fighting to gain approval for new facilities in their hometowns, Portland remains a possible target for these franchises to relocate. That is unlikely to happen as long as Tom Potter remains the city’s mayor, as he is opposed to publicly financing a stadium and said that his constituents “couldn’t care less about a baseball team.”65 Part of the argument against municipal funding of stadiums is that the cost of the stadiums continues to rise. Hamilton County (Ohio) is having difficulty paying off its two new stadiums for the Cincinnati Reds and Bengals. Hamilton County faces a $191 million deficit over the next 26 years to pay off its bonds. “The fund is in danger of racking up massive deficits because spending obligations are outpacing revenue from the half-cent sales tax, which commissioners in the mid-1990s thought would pay for the two stadiums and other items. The county must also plan for building a new $225 million jail. Paying the debt will require a decision to either take the money from the general fund or extend taxes.”66 Then again, horror stories like Hamilton County or outspoken mayors like Tom Potter have failed to deter cities from making deals. The New York Jets failed to get approval for a stadium in New York City, but then still received some share of public money in the deal to build a new stadium with the New York Giants. And in the nation’s capital, Washington, D.C. 22
  23. 23. is prepared to spend as much as $611 million on the new ballpark for the Washington Nationals.67 RECENT DEVELOPMENT: THE IMPACT OF HURRICANE KATRINA One event that could prove to be a major factor in sports facility planning and construction for years to come is Hurricane Katrina. The storm could have a pronounced effect on supplies like steel, concrete, drywall and PVC piping.68 Construction companies have already been forced to compete for supplies with increased demand for steel in China and India.69 Larry Lippold, project manager for Toronto-based Stadium Consultants International, said, “On major stadium projects, this could have a significant impact for a number of months, even years.”70 Estimates of how much construction costs will go up range from 12 to 20 percent. A 12-percent increase “would add $75 million to the Indianapolis Colts’ stadium.”71 Washington, D.C. is concerned about it being 20 percent. Stephen Green, the city’s director of development, said, “Twenty percent on a $250 million stadium is $50 million. The sheer image of the numbers is staggering.”72 Studying past devastating hurricanes, Ken Johnson of Hunt Construction Group found that “Andrew in 1992 and Hugo in 1989 did not have a lasting impact on demand or project costs.”73 IN-DEPTH LOOK: ARLINGTON VS. SAN DIEGO Two of the 16 cities that have opened baseball ballparks in the Camden Yards Era are Arlington, Texas, and San Diego. The two cities demonstrate the vast differences one can find when municipalities get involved in the stadium game. Just two years after PETCO Park opened, San Diego has seen how a ballpark can be a vibrant addition to a community and spur development. Ameriquest Field (originally named The Ballpark at Arlington), meanwhile, has had much less success. A dozen years after its grand opening, Rangers owner Tom Hicks is just now making plans to deliver on the team’s promise to invest development in the area surrounding the ballpark. 23
  24. 24. TABLE 4 ARLINGTON VS. SAN DIEGO Texas Rangers San Diego Padres Arlington Stadium Site Downtown San Diego Ameriquest Field Stadium PETCO Park 1994 Year Opened 2004 $191,000,000 Stadium Cost $450,000,000 $135,000,000 Public Portion of $303,300,000 Funding Arlington Stadium Previous Stadium Qualcomm Sources: Sports Business Research Network, ARLINGTON On, the team’s web site writes, “The beautiful baseball-only facility serves as the centerpiece of a 270-acre complex which solidifies Arlington, Texas as an entertainment giant in the Southwest.”74 The Rangers, then owned by George W. Bush, chose Arlington, which lies midway between Dallas and Fort Worth, rather than choose a site in downtown Dallas. Arlington provided the majority of the financing for the ballpark, encouraging the Rangers to make their home there. Yet, being more than 30 minutes away from Dallas (2003 population: 1.2 million75) and Fort Worth (2003 population: 585,12276) has cut down on possible ancillary traffic to the ballpark area from the region’s two biggest cities (Arlington’s 2003 pop.: 355,00777). The only other major development near the park is a Six Flags. The rest of the area: vast parking lots. Arlington voters agreed to fund $135 million of the $191 million baseball park with a half-cent sales tax. In return, they expected development from the team’s owners. In the run- up to the election (which passed overwhelmingly 2-1 in 1991), Bush said “that the stadium would bring economic benefits to Arlington, including commercial development of the area adjacent to the ballpark.”78 That never occurred. Writes Dan McGraw in the Fort Worth Weekly, “One reason The Ballpark in Arlington (now Ameriquest Field) has not sparked any 24
  25. 25. surrounding development in the past decade is that fans come to games, park, go to the game, and then drive home.”79 A few restaurants that were built in the accompanying area are only full on game nights; on other nights, the infrastructure was never put in place to build the development that could fill them up more regularly. That should finally change soon. Hicks, who owns 150 acres of land surrounding the park, is planning a town center with millions of square feet of retail stores, apartments, offices and possibly a hotel to open by October 2008.80 The area around the ballpark should also get an additional boost in 2009 when the Dallas Cowboys open their new stadium next door to Ameriquest Field. The promise of a ballpark will finally deliver the development that the residents sought, nonetheless it came a decade later than they anticipated. SAN DIEGO PETCO Park was crafted with its region in mind. “It celebrates the sea, the sky, the natural beauty, cultural diversity and unique spirit of our region,” writes the team’s web site.81’s description of the HOK-developed park reads, “At street level, arcades recall the simple beauty of the early Spanish missions with a palm court, jacaranda trees, and water walls leading spectators into the Ballpark. Distinctive, strategically placed 200-foot tall towers provide unique functions, ranging from supporting lights for the playing field to housing luxury suites and lounges.”82 Outside the ballpark, the city is busy developing the “Ballpark District,” a 26-block neighborhood in the East Village of offices, retail stores, hotels and condominiums that is expected to become a year-round destination and is within walking distance of the Gaslamp Quarter. The park is also close to the San Diego Convention Center and at the heart of the city’s transit system.83 As part of the city’s investment in PETCO, the Padres were required to build $311 million worth of new development around the park.84 A map illustrating the construction around the ballpark is one that shows incredible promise and movement. The region has 25
  26. 26. undergone an incredible building boom with warehouses turning into lofts and more. Matt Smith of S.F. Weekly wrote the city “now must grapple with problems born of a growth explosion the city wasn't prepared for.”85 As Peter Hall, the president of the Centre City Development Corporation said, “We hoped to hit a home run, and we hit a grand slam.” 86 “The ballpark also is credited with accelerating several public projects, including a new main library and the Park to Bay Link, a pedestrian-friendly boulevard connecting Balboa Park and San Diego Bay.” 87 SPORTS FACILITIES ANALYSIS Sports teams are often referred to as “toys.” Throughout history, rich men have bought franchises to feed their egos. Sports have their own section in the newspaper, championship teams are given ticker-tape parades and teams’ day-in-and-day-out activities are shared by millions of fans. No other business is treated similarly, and thus, it is difficult to compare sports subsidies with other subsidies to other businesses, because indeed, sports franchises offer intangible benefits to a public, in addition to possible economic advantages. This became increasingly clear when Camden Yards opened to a full house in 1992, as the sports industry entered a new phase. Sixty-five facilities have opened since that April afternoon at a cost of more than $18 billion, much of it taxpayer money. Although many facilities are now coming with a $500 million price tag and the opposition to such facilities is growing more vocal, there likely will be no slowdown on facility construction. The remainder of this decade will be a busy one, as at least eight facilities should open or be near completion,88 a number of facilities should undergo major renovations89 and another nine franchises hope to come to a resolution in the next year, whether it be a new facility in their current city or possible relocation.90 The benefits for a franchise are clear. As Neil deMause, a critic of many sports stadium deals said of Camden Yards and the Rogers Centre (formerly known as the SkyDome, which opened in 1989 in Toronto and featured many unique extras, including a hotel with playing field views): “They showed a lot more revenues could be gotten than just selling tickets. It has 26
  27. 27. made people realize that a) public money is available and b) there is a tremendous amount of profit available.”91 Franchise owners and players have benefited greatly from the increased revenue streams. Franchise values in the four major sports in the United States have shot through the roof and the average salary in Major League Baseball has escalated in the Camden Yards Era when stadiums began opening throughout baseball (Table 5). Salaries have grown 558% since 1989 when the Rogers Centre opened and 264% since Camden Yards opened 14 years ago, an average annual growth of more than 17.6%. TABLE 5 AVERAGE SALARY IN MAJOR LEAGUE BASEBALL Season Average Notes (new stadiums, expansion) salary 1989 $512,804 SkyDome 1990 $578,930 No new stadiums 1991 $891,188 U.S. Cellular Field 1992 $1,084,408 Camden Yards 1993 $1,120,254 Florida and Colorado join MLB 1994 $1,188,679 World Series canceled; Jacobs Field, Ameriquest Field 1995 $1,071,029 Coors Field 1996 $1,176,967 Turner Field 1997 $1,383,578 No new stadiums 1998 $1,441,406 Arizona and Tampa Bay join MLB; Chase Field 1999 $1,720,0501 Safeco Field 2000 $1,998,0341 Comerica Park, AT&T Park, Minute Maid Park 2001 $2,264,4031 Miller Park, PNC Park 2002 $2,383,235 No new stadiums 2003 $2,555,476 Great American Ball Park 2004 $2,486,609 Citizens Bank Park, PETCO Park 2005 $2,632,655 No new stadiums 2006 $2,866,544 Busch Stadium Source: 27
  28. 28. As salaries in sports have gone up, so has the need to generate revenues to maintain operating revenues. Newer facilities have allowed franchises to accomplish that, and helps explain the latest stadium building boom. It is similar to the one the country witnessed in the 1960s and 1970s. From 1965-76, ten stadiums were constructed with football and baseball in mind (Seattle’s Kingdome also housed the NBA’s Sonics for a number of years as well). During that era, municipalities sought multi-purpose facilities that could serve two sports, football and baseball. It was a cost-efficient answer, and seemed reasonable as their seasons overlap only in September. Multipurpose facilities popped up throughout the country and nearly half the baseball teams in America played in a facility that also housed an NFL franchise. But the multi-purpose facility created more problems, and explains why it is becoming an endangered species. First, none of the stadiums could adjust to the drastically different layouts for the two sports. Second, the facilities did not have the luxury suites and amenities that a modern-day franchise needs. TABLE 6 STADIUMS OF THE MULTI-PURPOSE ERA City Stadium Year opened Final Year Houston Astrodome 1965 1999 Atlanta Fulton County 1966 1996 St. Louis Busch Stadium 1966 2005 1 San Diego Qualcomm 1967 2 Oakland McAfee Coliseum 1968 Cincinnati Cinergy Field 1970 2002 Pittsburgh Three Rivers 1970 2000 Philadelphia Veterans Stadium 1971 2003 Seattle Kingdome 1976 2000 Source: 1 The Padres now play in PETCO Park. The Chargers are still seeking a new facility. The Oakland A’s are seeking a new facility, while the Raiders still remain. 2 28
  29. 29. The facilities that have been built in the past 15 years are different. There’s no reason to doubt they will be around much longer than the facilities of the ’60s and ‘70s. Camden Yards ignited the one-sport facility, which allows them to be repurposed better when necessary. As HOK Sports Senior Project Designer Michael L. Wekesser said, “I don’t see us tearing down Camden Yards in 20 years. Or Detroit’s (Comerica Park). In our business, a lot of work is to retro-fit these stadiums. Tear out suites and put in club seats. Tear out club seats and put in suites. I see that being the trend. Mainly, they are one sport only.”92 HNTB’s Cahill added, “I don’t know the life expectancy. I would think these would last longer. Most are built specifically for a main tenant. The flexibility is being built in with the suites and the club seats. It could last longer than the last ones did. The designer has to build enough expansion ability so that they do stay useful. It’s a lot easier now because the stadiums are for one use now. Here in Kansas City (Kauffman and Arrowhead recently had major upgrades approved by voters), the bowls are great. And the seating is great. There’s just not enough suites, not enough points of sale, not enough variety of things to buy. That will also allow them to last longer.”93 The points of sale that Cahill refers to are the key. Points of sale offer fans the ability to get what they want at a game, whether it is crab cakes, clam chowder, sushi or the traditional hot dog. For a team owner, it means maximizing revenues. The new facilities offer that. Outside the ballpark, sports franchises have demonstrated their ability to have a major impact on their community. While sports economists have theorized that sports franchises and facilities cannot spur economic development, there is evidence that they can indeed help guide growth. Mark Rosentraub, the dean of urban affairs at Cleveland State University and a frequent critic that sports facilities can act as economic creators, said facilities can “function as focal points around which apartment buildings, stores, restaurants, and bars cluster.”94 Some of the best examples are Camden Yards, San Francisco’s AT&T Park95 and more recently, San Diego’s PETCO Park, where the stadium has helped turn a “desolate area full of abandoned lots and storage facilities into a landscape of luxury condominiums and boutique hotels.”96 29
  30. 30. Neal Pierce adds, “The handsome Oriole Park at Camden Yards in Baltimore, Coors Field in Denver's Lower Downtown, Jacobs Field and the Gund Arena at the Gateway Project in Cleveland -- all are examples of good sports planning and design that fit into and enhance a city.”97 You can count Philadelphia as a city that missed the boat when it created a “stadium district” of three new facilities erected since 1996 and all within a few blocks of each other -- the Wachovia Center for the 76ers and Flyers, Citizens Bank Park for the Phillies and Lincoln Financial Field for the Eagles. Instead of choosing a central location that could have provided an opportunity for growth, the stadiums are surrounded by the other facilities and thousands of parking spaces. Philadelphia photographer Sandy Sorlien, blames it on NIMBYs (not-in- my-backyard folks) for preventing a location just north of Chinatown or at Broad Street and Spring Garden on the northern edge of Center City: “Either of those spots would have been fantastic for urbanism -- walking distance from trains, buses, and subways; near restaurants and bars; intimate views of the Center City skyline instead of the distant one we have now.”98 With the stadium district, there is little chance of economic development from the facilities on Philadelphia, taking away from the opportunities that Baltimore displayed. Camden Yards helped spur an excitement about sports architecture. Not since the Brooklyn Dodgers left Ebbets Field in 1957 (it was demolished in 1960) has there been such a love affair for a sports stadium. Now they are taking the next step, by becoming a source of economic growth within a city. In Brooklyn, Andrew Zimbalist has determined that New York City and New York State could benefit by more than $1 billion over the next 30 years with new tax revenues from the New Jersey Nets relocating and the subsequent development being built around the arena. Yet, even beyond the economics of a sports franchise is the actual value a franchise has to a city. New Englanders waited 86 years to see the Red Sox win a World Series; when they did, more than 3 million fans took part in the team’s victory celebration. Other sports franchises have similar acts of loyalty. It’s something that cannot be computed easily, and helps explain why sometimes the stadium game is not just a matter of dollars and cents. 30
  31. 31. “There’s a big difference between never having a team and losing one. So you grudgingly do this and hold your nose,”99 said Allegheny County Commissioner Mike Dawida as he and other officials worked out a deal to keep the Pittsburgh Steelers in town by helping to pay for the construction of Heinz Field. And that’s why, with a city like San Antonio trying to entice the Florida Marlins or the NFL publicly planning a return to Los Angeles, that the stadium game is not going to end anytime soon. Instead, it’s a matter of figuring out what is right in one’s city and planning it appropriately. BATTER UP: WASHINGTON D.C. Washington, D.C. is the latest city hoping to use a ballpark as a catalyst for development, as it prepares to begin construction on a new ballpark for the Washington Nationals in the Anacostia neighborhood of the city. Mayor Anthony A. Williams has promised an entertainment district that “will include luxury condos and office buildings and create millions of dollars in annual tax revenue.”100 Other benefits Williams has cited are new jobs for the city and millions in new revenue from gate receipts. As he said at a press conference announcing the deal, “This is a really incredible day. America’s pastime is coming back to this city and once again giving us the ability to dream great things.’”101 Once again illustrating the ability of facilities helping to facilitate economic growth, Cleveland State’s Dean Rosentraub sees evidence that Washington has the ability to make it work: “The key is when you have the private sector development up front, and it looks like D.C. has that commitment. If you do that well, it works.”102 Washington has some experience as well. The city quickly paid off its debt service on the Verizon Center and the area around the arena for the Capitals and Wizards has flourished. “In the District, stadium boosters have used the Verizon Center’s success as an example of the economic impact a sports arena can have on a sluggish area. Gallery Place now teems with upscale chain shops and restaurants and has a movie theater and a bowling alley, although most have come in the years since the arena’s opening in 1997.”103 31
  32. 32. Just across the Potomac from Baltimore, Washington, D.C. is looking to steal some ideas from Baltimore. It’s clear, in Camden Yards’ 14th year, that the game has changed, but it’s not over. CONCLUSIONS In sixteen years, Camden Yards will open its gates for its thirtieth season. The Orioles have new competition in its market now that the Washington Nationals have relocated from Montreal. By then, the Nationals will have opened their ballpark in an area seeking growth and built a strong fan base. For the Orioles, the question will be whether a newer facility should be in the works or to keep the ballpark that revolutionized the game fresh. For Janet Marie Smith, she is confident the Camden Yards she planned two decades ago will still be considered a gem. “I would say we achieved our major objectives of trying to create an atmosphere that would sustain itself for beyond the ups and downs of the game. We were always very anxious of how we far into the future we could see. How do you know you are building the elasticity into a venue? Who can really see into the future? That is something we were hoping we would achieve with Camden Yards, something that would be significant enough to weather changes that might occur in the marketplace.”104 The end is not in sight for the construction of sports facilities. As long as some franchises are not able to achieve equal revenue streams in their stadiums as their nearest rivals, there will always be a demand. Municipalities need to make the decision of how important a sports franchise is to their status in America. Some cities have made the choice that it is indeed extremely important (Indianapolis being the latest example). Others have seen franchises move and made little movement to prevent defections. Based on my research and analyzing many deals that have taken place over the past 15 years, these are the conclusions and recommendations I have to make: 1. Ruthian impact. Babe Ruth was born near the site of Camden Yards, and the Babe’s impact on the baseball world -- and all of sports -- continues today. Camden Yards changed the world of sports. It created a buzz for baseball architecture for the first 32
  33. 33. time in decades, advanced ideas for creating revenue streams for sports franchises and started a trend for cities to use ballparks as a major piece of urban redevelopment. 2. The Camden Era Boom. Following Camden Yards’ grand opening, franchise owners began to recognize the power of luxury seating and additional amenities to achieve greater revenue streams. It has greatly benefited team owners and the players they pay, as well as the big-pocketed fans who can afford the exorbitant prices. New facilities offer team owners the ability to gain new riches, and helps explain the major building boom witnessed following the opening of Camden Yards. 3. Passion divides interests. The essence of big-time sports is the passion every participant feels, whether it be a fan or player. The sports facility fight brings that to the forefront, as elected officials not only must examine major capital projects against other backdrops, but also determine the importance of a franchise is to a region. For example, imagine the Red Sox playing in Hartford? Or the Cubs in Gary, Indiana? Or the Lakers moving to San Diego? It won’t happen. Likewise, a stadium and a franchise bring more to a community than job opportunities and hope for the ability to revitalize a community. A franchise’s intangible qualities are why a politician in Pittsburgh may say that he would be hung if he let the Steelers leave town. Franchises can offer valuable pride to a community, as can a new sports facility, a meeting place for a community to join together as one. It is impossible to rank its value, but no economist can debate its importance. 4. Urbanism. It has been witnessed in cities throughout America that a sports facility can help spur development in an urban area. When the commitment has been made by the municipality and other partners, like it has in Denver and San Diego, the opportunities are vast. Entertainment districts, loft condominiums and more are feasible. A baseball ballpark -- when properly built in a city -- can bring more than three million fans into an area over the course of six months. In an urban setting, they will pass restaurants, bars, stores and more. Cities should take advantage and build. 33
  34. 34. 5. Public Consumption = Public Funding. It is acceptable for sports franchises to accept public support for the construction of a stadium. It is a municipality’s function to fund projects that will spur economic growth and civic pride. A sports facility does that, for many reasons. First, a sports organization can spur economic growth with aligned development projects in its surrounding communities. Second, sports franchises are a great source of community pride, with fans attending events or following their hometown team on television, radio or the Internet. Third, athletes’ involvement with the community -- whether by donating tickets, visiting a hospital or other charity organizations -- demonstrates the value of a franchise to the public. Those factors combine to illustrate why a public-private partnership is appropriate. 6. The Future is Bright. Finally, the current facilities should indeed last longer. The proper measures are being taken to avoid situations like the Miami Arena or the Charlotte Arena, arenas that were outdated less than a decade after they opened because they didn’t have the proper premium seating. Today’s sports facilities have all the proper enhancements, and more than that, they are expandable. By creating single- purpose facilities, they should last longer and better withstand future changes. FUTURE RESEARCH There are other areas of study that should be explored following the completion of this paper. That includes looking at an individual city and how it handled the stadium pressure game. In particular, in two years, it would be interesting to look back at the stadium game in the New York metropolitan area, a region that hasn’t built a new Major League stadium in more than 20 years. As many as five or six new sports facilities could be constructed, completely overhauled or in the planning stages by April 2008. If all goes according to plan, Yankee fans would be counting down the days to the end of Yankee Stadium, Brooklyn residents would be lining up for tickets to see their first Major League team since the Dodgers left in the ’50s and Jets and Giants fans would be getting excited to see their team with all the amenities football fans around the country have come to expect. 34
  35. 35. APPENDIX I CURRENT MAJOR LEAGUE BASEBALL BALLPARKS Team Stadium Year opened Cost % Public Notes Contribution St. Louis Busch Stadium 2006 $387,500,000 0% Stadium opened April 10. Most seats have views of the Gateway Arch and the downtown St. Louis skyline. Philadelphia Citizens Bank Park 2004 $346,000,000 50% Venue was partially financed through a 2% rental car tax. San Diego PETCO Park 2004 $450,000,000 66% Part of redevelopment plan in downtown San Diego. Cincinnati Great American Ball Park 2003 $289,000,000 89% The Reds have agreed to a lease of $2.5 million a year for the first nine years, then one dollar a year until year 30. In exchange, the team will get parking revenues, baseball- related parking revenues at county facilities near the ballpark and revenue from concessions, luxury suites, naming rights and signage. Overall, the new stadium is expected to mean $20 million to $25 million a year in additional revenue to the team. Milwaukee Miller Park 2001 $400,000,000 78% In its first year, 2.81 million fans visited the park, resulting in $110 million in operating revenue. In its last year at County Stadium, the team earned $68 million in operating revenue. The additional revenue in 2001 was enough for the team to post a $6.7 million profit, compared to a $2.01 million profit the previous year and a $22.34 million loss in 1999. In 2002, the team's attendance fell to 1.97 million and owners had to invest $11.7 million in additional capital. Total operating revenue was $104 million and total operating expenses were $106 million. A reconfiguration of the team's debt allowed it to show a $30.38 million paper profit for 2002, but the newspaper report said the team actually lost $11 million. Pittsburgh PNC Park 2001 $250,000,000 85% Will host MLB All-Star Game in 2006. Detroit Comerica Park 2000 $295,000,000 45% Tiger Stadium, one of the oldest ballparks in baseball, closed in 1999 to make way for 35
  36. 36. Comerica Park. Tiger Stadium had only five suites and the Tigers got only a percentage of revenue from parking and concessions. Houston Minute Maid Park 2000 $248,200,000 68% The team gets all revenues generated by the ballpark. San Francisco AT&T Park 2000 $319,000,000 0% The Giants earned a reported $160 million in revenues for 2000, much of which can be credited to the team's new privately-financed ballpark and 7.5 percent higher than the team’s budget expectations. Seattle Safeco Field 1999 $517,000,000 76% The ballpark was funded through an increase in the sales tax for restaurant food and drink, rental cars and stadium admissions. Arizona Chase Field 1998 $354,000,000 75% Venue was financed through a 0.25% county sales tax increase that will generate $15 million. The rest of the bond financing will come from stadium revenue and the Diamondbacks. Atlanta Turner Field 1997 $234,000,000 100% Venue was funded with money raised for the Olympic Games. Colorado Coors Field 1995 $215,000,000 75% Is located in a 25-square-block historic district in Denver known as lower downtown (LoDo) that has been revitalized since Coors Field opened. Cleveland Jacobs Field 1994 $180,000,000 82% A 15 percent tax on alcohol and cigarettes will generate $117 million and bonds totaling $31 million were issued against stadium revenue. Texas Ameriquest Field 1994 $191,000,000 71% The ballpark was financed by private investors and through a half-cent city sales tax increase which is responsible for $135 million of its cost. The Rangers have a stadium lease which allows them to keep all ticket revenue, including $7 million annually from luxury suites. The Rangers pay the City of Arlington, which owns the ballpark, up to $5.5 million annually in rent and ticket surcharges. Baltimore Camden Yards 1992 $110,000,000 96% Facility paid for by the state lottery and tax- exempt bonds. Chicago White Sox U.S. Cellular Field 1991 $150,000,000 100% Built one year before Camden Yards, the White Sox removed 6,600 seats in 2005 to make it more fan-friendly. Tampa Bay Tropicana Field 1990 $85,000,000 100% The team’s new owner says the team does not need a new ballpark and promises that 36
  37. 37. he'll never come to public officials and say so. Toronto Rogers Centre 1989 CAN $570,000,000 63% In November 2004, the owners of the Toronto Blue Jays, Rogers Communication, purchased their home stadium, the SkyDome, from Sportsco International and renamed it the Rogers Centre. Florida Dolphins Stadium 1987 $115,000,000 0% Co-tenants with the Miami Dolphins. Currently seeking a new stadium deal and have had talks with other cities, including San Antonio. Minnesota Hubert Humphrey Metrodome 1982 $75,000,000 91% Co-tenants with the Minnesota Vikings. They are currently seeking approval for a new ballpark in Minneapolis. Kansas City Kauffman Stadium 1973 $21,500,000 100% Voters recently approved a 3/8-cent sales tax to raise $425 million to overhaul Arrowhead and Kauffman stadiums. In addition, the Chiefs are contributing $75 million and the Royals $25 million, and state officials have agreed to provide $50 million in tax credits. The teams’ contributions will cover all costs associated with suites. The teams will pay cost overruns.105 Oakland McAfee Coliseum 1968 $25,000,000 100% Co-tenants with the Oakland Raiders. Exploring relocation possibilities, including Fremont, if they cannot get a new facility in Oakland. LA Angels Angel Stadium 1966 $24,000,000 100% The Angels split luxury suite revenue with the City of Anaheim. NY Mets Shea Stadium 1964 $24,000,000 100% Recently unveiled their proposed $550 million ballpark, which resembles Ebbets Field and will rise next to Shea Stadium. The city will provide $165 million in infrastructure costs and $528 million in tax- exempt financing for the ballpark to be repaid through payments in lieu of taxes.106 LA Dodgers Dodger Stadium 1962 $23,000,000 0% After the 1999 season, the team began a $50 million renovation project that resulted in 33 new luxury suites and a special 565-seat section behind home plate. Washington RFK Stadium 1961 $19,000,000 100% Washington, D.C. will pay up to $611 million to build the Nationals a new ballpark. NY Yankees Yankee Stadium 1923 $3,200,000 71% The plan for their stadium to be completed in time for Opening Day 2009. Chicago Cubs Wrigley Field 1914 $250,000 0% In April 2005, the Cubs and Chicago city 37
  38. 38. officials agreed on a plan to expand Wrigley Field. The expansion will add nearly 1800 bleacher seats to the outfield, a 100-seat restaurant overlooking center field, and a year round five-story building and parking garage west of the field that will house retail stores, another restaurant and 400 parking spaces. Boston Fenway Park 1912 $420,000 0% Red Sox plan to have renovations of Fenway completed by its 100th anniversary. Sources: Sports Business Research Network, Sports Facilities Report 38
  39. 39. APPENDIX II CURRENT NATIONAL FOOTBALL LEAGUE STADIUMS Team Stadium Year opened Cost % Public Notes Contribution Arizona Cardinals Stadium 2006 $355,000,000 75% Recently recognized as one of 10 World- class stadiums by Business Week.107 Philadelphia Lincoln Financial Field 2003 $510,000,000 39% The Eagles and Phillies agreed to 30-year leases and will give $60 million over the 30 years to child benefit programs. If the teams are sold, the city will get 25 percent of any value added because of the new stadiums. Detroit Ford Field 2002 $350,000,000 83% The Lions got no revenue from luxury boxes, concessions or parking at the Silverdome, which put them near the bottom among NFL teams in terms of stadium revenue and made a new facility that will produce revenue for the team a priority. The new stadium has 125 suites. Houston Reliant Stadium 2002 $424,000,000 63% The Harris County-Houston Sports Authority paid $195 million for the stadium from an existing hotel and motel tax with the rest coming from the Houston Texans and the Houston Livestock Show and Rodeo, another major tenant of the building. New England Gillette Stadium 2002 $325,000,000 0% The Patriots received infrastructure help only. Team Vice Chairman and President Jonathan Kraft said the team chose this route because, “If we wanted to stay in Boston, we didn't have a choice but to fund the project privately.”108 Seattle Qwest Field 2002 $430,000,000 66% The stadium was paid with $100 million from team owner Paul Allen, $127 million from new sports-related lottery games, $101 million in sales taxes in King County attributed to events in the stadium, $56 million in admissions and parking taxes and $15 million from existing hotel-motel taxes. Denver INVESCO Field at Mile High 2001 $400,800,000 75% While the Broncos get most of the new stadium revenue, it will pay the city $2.7 million a year through 2008 in lease 39