This article by Matt Rossetti was originally featured on The Fields of Green, a new sports business website co-partnered by USA Today and the USC Marshall Sports Business Institute. #FOG_sports
It’s taken about a decade for the stand-alone sports venue to evolve into the sports anchored development – loosely defined as an entertainment venue that nestles into an urban center and provides new mixed-use options. These districts are designed to generate a vibrancy 24/7 from sports and entertainment events, as well as living, working and playing. Or not. It’s a compelling theory that alludes to win-win results for venues, sports teams and cities. In reality, we’ve seen that success lies in a tricky mix of components propelled by smart development strategies, customized options, creative financing, aggressive programming and master planning. As sports anchored developments have evolved, we’ve learned lessons about common success factors.
1) UNDERSTAND WHAT DRIVES YOUR SPORTS AND ENTERTAINMENT DISTRICT
Going beyond the surface demographics and looking at the psychographics of each team and city will help in developing unique development options. The components that have the most success converge with the team(s), multiple entertainment options and a mixed variety of housing nearby.
2) CAPITALIZE ON GOVERNMENT POLICIES
Around the world, government-sponsored Free Economic Zones are a catalyst for development, providing cities, counties or districts the ability to develop semi-independent economies, including sports anchored developments. For example, South Korea officially established the Incheon Free Economic Zone in 2003, which offers tax reductions, estate support, and development subsidies, and spurred Incheon Football Stadium along with its 22-acre Sungui Arena Park.
In Grand Rapids, Mich., the Grand Action Committee was instrumental in the development of Van Andel Arena, a sports anchored development that is credited for generating over $500 million in economic development within 10 years of opening.
3) FOLLOW THE POTENTIAL MONEY
Financing usually requires a major benefactor through the team, sponsors, or municipal bonds that are backed by a private company and can be paid back through property taxes.
4) CAPTURE CONCENTRIC REVENUE
Incremental income is captured in the first layer of development closest to the venue, such as retail, bars, hotel rooms, restaurants, and urban housing options. The trend is to integrate this along the edges of the venue. Municipal income taxes help offset the infrastructure costs of the development.
5) EXTEND THE CONCENTRICITY
The second layer captures long-term revenue. Typically, the easiest way to capture this revenue is from housing and commercial uses. Post-2008, the trend has been through rental units that later convert to condominiums. Retail shops and restaurants also offer higher volume revenue, but are not as consistent as housing.
6) EMBRACE STRATEGIC PARTNERS
Take economic impact measurements seriously and partner with local organizations to help tell the success story. In Cincinnati, for instance, Paul Brown Stadium and Great American Ballpark have been constructed since 2000. These major stadiums had a combined project cost of $912 million and, in return, the economic impact from both stadiums is estimated at $1.12 billion.
7) POROSITY MATTERS
Density is the critical factor in creating a “sense of place.” While some sports venues and their mixed-use components are built as a package, others must sandwich into already established neighborhoods. By creating programs that relate to the existing neighborhood context and community desires, the development will have greater success at maintaining its vibrancy. Today’s trend is to create “porosity” along the base of the venue which is filled with retail. Incheon Football Stadium was designed with a convention center and banquet halls in the south end of the venue to accommodate the Korean tradition of large celebrations.
8) FOCUS ON INGRESS AND EGRESS
Finally, transit-oriented development may be the single biggest factor in determining long-term success. Creating pedestrian-friendly cities starts with funneling a variety of transportation options to the district and linking those to established neighborhoods. At the USTA’s Billie Jean King Tennis Center in Flushing Meadow, N.Y., 750,000 people converge on the campus over a two-week period during the U.S. Open. Approximately 70 percent of attendees arrive on the 7 Train, thereby easing circulation and eliminating the need for parking lots. In Stockholm, the Tele2 Arena, Hovet, and Globe Arena use three metro stops to feed fans into the sports and entertainment district. A well designed arrival and departure sequence maximizes memory making for fans.
Sports anchored developments will live up to the revitalization dreams of developers, teams and cities when the master plan creates relevance beyond entertainment. Partnering with planners and architects early in the development will ensure that studies and master plans consider the many factors and issues highlighted above to make the development and its surrounding community successful.