17.8.10

Target Field's Economic Boon (The Sidewalks of Target Field Part 3)



[Fans outside the Loon Cafe on gameday.]

For a long time during the 80s and 90s, sports stadiums were billed as the crucial big ‘megaproject’ that would resurrect downtowns. For planners, politicians, construction companies, the media, and sports team owners (and that’s a large chunk of any city’s local power base), stadiums were shiny silver bullets with silver linings and silver tongues. They could bring people back to downtown, increase economic activity, attract tall buildings in a single bound, etc.

In an argument that will be familiar to anyone whose ever attended a public/private partnership powerpoint presentation, stadium boosters attempted to undermine critics by talking about how stadiums would increase local economic activity, and therefore boost a city's and region's tax revenue. Stadiums would "revitalize neighborhoods", bring in tax dollars, return people and their wallets to the city, lead to an avalanche of new sports apparel shops, sports bars, and local giant-foam-#1-hand factories. Shiny, large, and ribbon-cuttable, plus they practically pay for themselves? They were the ultimate in ‘win-win’ projects.*

Well, as the vacant lots surrounding the Metrodome will testify, it turned out that stadiums were not necessarily supercharged economic magnets. Beginning with Baade and Dye’s influential 1988 article “Sports stadiums and economic development: a critical review” (which suggested stadiums might not have actualy have a positive impact) and then their subsequent 1990 expansion of the argument, (which suggested that stadiums were not only neutral, but had "possibly negative impact" on the surrounding area) the urban economic planning world began to turn on the idea of stadiums as economic development tools. Since the good old days of the 80s, urban economists have systematically debunked the slick claims and magic bullets and of the stadium's snake oil lobbyists. As it turned out, stadiums weren’t that great. Nobody really wanted to be near them. They were uncomfortably large and looming. They caused tremendous amounts of traffic congestion whenever they were in use. Any economic activity that they did generate was probably just shifted from some other place nearby, cannibalizing other retail or entertainment dollars spent in the city.

But, on top of that, there was a basic paradox at the heart of the economics of stadiums. For city planners and local boosters, the goal was to have the stadium’s activity ‘trickle down’ and spread out, having ‘multiplier effects’ that cascaded through the local entertainment and hospitality industries. But, for the owner of the sports team, the goal was to keep as many of those entertainment dollars as possible within the team’s income stream. Stadiums were built with an ever-expanding suite of team-controlled revenue streams. Stadiums were built to include their own bars, restaurants, sporting apparel stores, parking lots, and even hotels. Stadium owners attempted to design places where every last dollar spent on the day’s outing went directly to the team. So, when it came to having local economic impact, teams and cities were very much at odds.

[Wrigley Field is surrounded by a neighborhood filled with buildings not owned and operated by the team owner.]

The economic paradox at the heart of stadium economics means that there is a lot of variability when you look around the country when it comes to how economically friendly each stadium is designed to be. At one pole, you have the classic old stadiums: Fenway Park in Boston, Wrigley Field in Chicago, or (old) Yankee stadium in New York. These were built on small footprints, without a lot of internal amenities and entertainment revenue streams. And, surrounding any of these places, you will find whole neighborhoods of small businesses and bars that have sprung up nearby. On gamedays, these places fill up with fans who hang out somewhere a few blocks away, having pre- or post-game drinks or food, happily spending a portion of their ‘sports dollars’ at someplace out in the city.

[From a local economic development perspective, Dodger Stadium sucks.]

On the other hand, you have the ‘stadium complex’, a la the old Metropolitan stadium, LA’s Dodger stadium (somehow now the 3 oldest stadium in the majors), or (worst of all) the new Dallas Cowboys ‘complex’ (though anything in Arlington TX would qualify). These stadiums aren’t in neighborhoods. Rather, they surrounded by a vast moat of surface parking lots, and the only thing they’re ‘close to’ is a highway exit ramp. Among other consequences, this allows the team to keep something close to 100% of the revenue from the sports fan. There simply isn’t any alternative to spending money with the team’s organization. And, the double-edged result is that the team owner makes off like a bandit, while the ‘local economic impact’ of the stadium is reduced to a minimum of income and business taxes.

There are various iterations of this concept, lots of stadiums that, even when they’re located in downtowns, are still try to keep all the dollars ‘within’ the stadium. Cincinnati is a good example: the stadium is surrounded by a big freeway and a much bigger river, too far from any other ‘neighborhood’ to have a great deal of impact. The Metrodome is another good example, even though its revenue streams were very small. The only businesses that received any benefit from the dome being there were surface parking businesses, Hubert’s, and that crappy “Twins and Vikings museum” that nobody ever went inside.

[The city of Cincinnati has systematically placed its stadia where they will have the least amount of local economic impact.]

Well, for a number of reasons, Target Field seems to be doing really well on this spectrum. It’s small footprint, located in the heart of a neighborhood that is already filled with activity, buildings, bars and restaurants, means that there are many ways that the economic activity of the stadium on game day spills out and trickles into other areas of Minneapolis. In fact, a while back the Strib had a column which is pretty much the best-case scenario for a sports stadium booster:

Not only are 40,000 people showing up night after night during home stands, but they're showing up with smiles on their faces and money in their wallets and a new desire to actually stay a while.

"The crowds are happy; they're not too drunk, and they hang out," Ober confirmed. "It's been great."

Of course, you're going to hear all about Target Field's ripple effect from Twins officials and the mayor and especially the Hennepin County commissioners who put up the tax money for the ballpark. But take it from the people who were on the battle lines, or tap lines: The mania for the Twins' new home has vicariously turned into something of a love affair -- or at least a rekindled likeship -- with downtown Minneapolis.

On top of that, hotel occupancy rates are up, and transit ridership has gotten a boost.

In short, unlike a great many new stadiums built in the US, the location of Target Field seems to be having lots of positive economic consequences for Minneapolis. Because the stadium is right smack dab in the middle of the area’s ‘entertainment’ district, places that usually rely on the weekend party crowd now seem to have a completely different set of customers and traffic from which to draw business. (Even the naked lady industry tried to get in on the action.)

It's impossible to say for sure. Studies of this stuff are notoriously unreliable. But judging from the anecdotal evidence of my own two eyes, its no small thing that the servers at both Pizza Lucé and Cuzzy's are now dressed in Twins garb throughout the summer. And, while it probably means that the teams revenue strem isn’t as full as Jerry Jones’ wallet, it’s a good thing for Pizza Lucé. And, if you ask me, what's good for Pizza Lucé is good for America.

[Even when they lose, there's a party on 1st Avenue after a Twinkie game.]

*Any time you see this phrase, squint your eyes and look suspicious.

7 comments:

Andy Sturdevant said...

Great as always, Bill, but calling that rinky-dink Twins/Vikings museum "crappy"?? It's a gem! Go in sometime! It's crammed to the rafters full of all sorts of Twins memorabilia, it's free, and the founder was once a bat boy for the Senators. There's also some Elvis stuff in there for good measure. It's exactly the kind of weird little neighborhood gem I wish we had more of around, insofar as the area around the Dome can be thought of as a neighborhood.

Bill Lindeke said...

very good. point taken. its kind of like the house of balls, very rewarding for the exploratory.

(how does "dingy" strike you as an adjective?)

anyway, anytime someone was a bat boy for the senators, i am in total awe.

Randy Simes said...

I agree with the crux of your argument, but I do want to correct you on your Cincinnati knowledge.

1) The two sports stadiums were placed within a flood plain...thus utilizing land that would otherwise not be considered developable by contemporary standards.

2) When the two stadiums were constructed following the reconfiguration of Fort Washington Way, it allowed for an area in between the two stadiums to be lifted from the flood plain and thus developed. Presently, a $1 billion mixed-use extension of downtown Cincinnati is being constructed. So to say that no economic activity will occur is a bit disingenuous.

3) In addition to the $1 billion development in between the stadiums known as The Banks, Newport on the Levee offers ferry shuttles to both Reds and Bengals games. The stadiums being located where they are have made Newport on the Levee more successful.

With all of this said, Great American Ball Park would have been better suited at the Broadway Commons location on the northeast corner of the central business district, and the eastern edge of the historic Over-the-Rhine neighborhood. This did not happen for a variety of reasons (mostly political), but it does not mean that the existing location fails.

Bill Lindeke said...

Thanks Randy!

I am woefully ignorant about Cincy. But I did really like it there. I found a great bar /coffee shop in the OTR at which I would totally be a regular.

anyway, apologies! Go reds! (Krivsky sucks.)

www.la-rioja-3d.com said...

Well, I do not actually imagine it is likely to have effect.

My Wacky Friends said...

I think everyone must read this.

www.madrid-3d.com said...

The guy is absolutely fair, and there is no suspicion.