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IF THEY BUILD IT...WILL YOU COME?
Many baseball stadiums help bolster sagging downtowns -- but only when they're built as part of a larger revitalization effort, economists say.
BY CINDY KRISCHER GOODMAN
cgoodman@herald.com
Look no further than Cleveland, Denver, San Diego or Baltimore when wondering whether a new baseball park for the Florida Marlins will bring economic benefits to downtown Miami.
Ballparks in those cities have thrived, but they have not been the sole catalyst for new economic activity. In most instances, hotels, housing and even convention centers have accompanied the sports facilities, part of a larger effort to bring business and people downtown.
In Cleveland, Jacobs Field, home of the Indians, was built on the edge of the city's central business district in 1994. Though the ballpark helped revitalize a blighted area, it was not the only factor. Lee Hill, president of the Downtown Cleveland Partnership, says the effort was boosted by a broader downtown revitalization plan that included bringing in some much needed hotels.
``The stadium's physical location -- it's contiguous to our central business district -- is important because hotels don't just cater to games, they cater to business travel,'' Hill said. ``There's retail that comes with that and some sports bars, moderate restaurants and souvenir shops.''
In Denver, Coors Field was just one part of an aggressive push by Mayor Federico Pena and his successor, Wellington Webb, to bring Lower Downtown back to life through a revitalization plan that included new housing and incentives to developers. The area now is bustling with restaurants, pubs, galleries, housing and pedestrian traffic on game nights.
In San Diego, the Padres said their new ballpark would help redevelop a blighted stretch of the city's downtown. In exchange for $296 million in tax money, the team agreed to build hotels and office buildings near its ballpark. However, the hotel chains that have agreed to come into the city's ballpark development have done so because of the nearby convention center, which is being doubled in size.
And in Baltimore, Camden Yards, the ballpark opened by the Orioles in 1992, was part of a broader renaissance of the city. Redevelopment of the city's inner harbor preceded construction of the Orioles' home and the football Ravens' stadium next door, creating a synergy that brought more visitors to downtown Baltimore.
The sports franchises were only a small piece of the rebuilt Baltimore downtown. There are tourist attractions open year-round, such as an aquarium. New hotels and restaurants exist because people come to the Inner Harbor area every day, not just on game days. And the renovated warehouse that is part of Oriole Park has brought 800 office workers to the area each weekday.
``You have to be careful not to have your expectations too high for what a ballpark by itself can do,'' said Ed Cline, deputy director of the Maryland Stadium Authority. ``A number of things working together changed downtown Baltimore.''
Robert Baade, an economics professor at Lake Forest College near Chicago, agrees that ballparks by themselves don't spur much economic development.
``Professional sports doesn't seem to be that good an investment, and taxpayers know that,'' said Baade, who studied 30 cities that built stadiums before 1987 to see whether they produced measurable economic benefits. He found nothing that was statistically significant.
THE MARLINS' PITCH
John Henry, owner of the Florida Marlins, wants the public to pay at least $266 million, or 70 percent, of the cost of a new retractable-dome stadium for his baseball team. While the Marlins would kick in $72 million in rent, fans would pay $47 million from a ticket surcharge, the city would contribute $26 million from a parking surcharge, the state would give $122 million from a sales tax rebate and the county would put up $118 million in hotel tax revenues.
Henry says the economic benefits of jobs and spin-off spending make keeping the Marlins in South Florida a good investment for taxpayers.
The Marlins say their operations would generate $254 million each year for other local businesses. However, since the team already plays in Dade County, that number does not reflect an accurate net gain.
``If you build a baseball stadium downtown, you might get a little more benefit for Miami -- and less for North Dade,'' said Andrew Zimbalist, a Smith College economics professor who is the author of Baseball and Billions and a critic of publicly financed stadiums. ``But for the county as a whole, there is no economic benefit from a new baseball stadium.''
WHY BENEFITS PALE
Economists note a number of reasons why the economic benefits of sports stadiums pale when compared with convention centers or retail/entertainment complexes: The spending generated by sports comes out of the same entertainment budget that local families already spend: They just shift their dollars to sports tickets and forgo other forms of entertainment. Also, except for a handful of administrators and players, stadiums provide mostly low-skill, low-wage service jobs.
Even more, new research shows that subsidies for sports stadiums may actually be an economic drag -- reducing per capita income of the community, according to a study by economists Dennis C. Coates and Brad R. Humphreys of the University of Maryland.
In cities with baseball franchises, for example, constructing a new ballpark is found to reduce income by $10 per person per year because subsidies for sports facilities mean that taxes must rise or that local governments must reduce other spending.
Henry argues that baseball helps define a community. He says new ballparks have become symbols for the cities in which they were built, some even transforming decaying areas.
In Detroit, where the Tigers' new home, Comerica Park, opened last year, supporters hope it will play a big part in revitalizing one of the most depressed urban areas in the country. The prospect of turning downtown Detroit into a vibrant neighborhood is what prompted public officials to put up $115 million for the project. The rest of the $290-million cost came from private sources.
``Comerica Park encourages people to walk around. Comerica Park will help to restore the excitement of urban life that has been missing all too long,'' Mayor Dennis Archer said shortly before the park opened.
But even in Detroit, investors say the ballpark is only one reason for them coming into the city, which is bustling with activity, including the opening of several casinos, theaters and housing developments in the downtown area.
Carl Hirsh, of Stafford Sports Ventures, said even cities that just build ballparks and see little new development tend to follow them up with some additional investment down the road. For example in Houston, where Enron Field opened last spring, construction will start next year on an arena for the basketball Rockets several blocks away. Last November, an investment group announced plans for a new hotel near Enron. In addition, at least two office towers are being built near the baseball field.
So far, the American Airlines Arena in downtown Miami has been open for a year. Though there has been private investment in land across Biscayne Boulevard, there has been little revitalization to the nearby blighted area to the west known as Overtown/Park West.
A BOOST IN ARIZONA
Henry might find some comfort in a 1999 study done in Phoenix after the Arizona Diamondback's Bank One Ballpark opened. The city noted in the study that sales revenues downtown increased 34.1 percent for the first half of 1998, compared with the same period the year before. While some of the spending occurred at the ballpark, most of it occurred at surrounding businesses, the study said.
However, several economists have questioned the report, saying any additional downtown revenue was offset by the taxpayers' $253 million contribution to the ballpark's $358 million construction.
In Miami, how much economic benefit a new ballpark would have may depend on where it rises and what accompanies its construction. At this point, the downtown Miami ballpark would be a stand-alone venture, with no overall revitalization plan proposed.
Politicians and property owners assert that a site on the north side of the Miami River would create more of an economic impact than the team's preferred location in Bicentennial Park, west of Biscayne Boulevard and adjacent to the American Airlines Arena. A third possible site is the area near the Miami Arena.
Miami Commissioner Johnny Winton said the river site has plenty of parking, synergy with the downtown business district, and easy access to public transportation.
``There is lots of surface parking and garage parking throughout the area,'' Winton said. ``That's what's going to drive economic development, pedestrian traffic walking to the stadium. People could open cafes and bars, and that leads to further economic development. Even West Brickell could be enhanced. There could actually be activity where you see none today.''
Philip Blumberg, chairman of the Greater Miami Chamber of Commerce and a downtown real estate owner agrees: ``The real estate impact of the facility where it is proposed in Bicentennial Park is far diminished if it's west of Biscayne Boulevard.''
Blumberg also notes that the investment and higher land values across Biscayne Boulevard already have been realized as a result of the American Airlines Arena.
``There's something to be said about spreading these arenas around downtown rather than concentrating them all in one area,'' Blumberg said. ``It creates a more vibrant downtown.''
TEAM OPPOSES SITE
The Marlins are opposed to building a ballpark on the Miami River site.
``The River site doesn't work,'' said Julio Rebull, executive vice president of the Florida Marlins. ``There's not enough land there. We have made that case and will make it again.''
Matt Mitten, director of the National Sports Law Institute of Marquette University Law School, said new sports venues can pay off for a city when they host a Super Bowl or an All-Star game, bringing additional revenue and visitors. But overall, stadiums are an expense with little return.
``It's not like a new company that moves to a city and builds a new plant and employs thousands of workers,'' he said. ``Usually the primary beneficiary of a new stadium is the ball club itself.''
Zimbalist said taxpayers should realize there are no economic benefits and decide whether the other benefits are worth the expenditure.
``They should look at whether it would increase the competitiveness of teams, whether it would be exciting for the city, and whether there are cultural benefits,'' he said. ``If the team wants...public money, you have to ask yourself, is it worth it to us socially and culturally to do this?''
The Marlins have said they must have a new ballpark or they will relocate to a new city. The team is projecting revenues of $145 million for 2004, when the new stadium would open. The Marlins say they lost $10 million this year after expenses at Pro Player.
``People want Miami to be a world-class community, but they are not willing to accept what goes along with it,'' said Miami-Dade Mayor Alex Penelas. ``What is going to be the tangible loss if the Marlins leave South Florida? There may not be many jobs lost, but we would lose prominent athletes and executives who serve as role models and lend their names and dollars.
``There is some economic benefit that is tangible, but I think the stronger argument is what is intangible and what having the team here means to the community.''