Why America is seeing a new stadium boom
From New York to Washington to St. Louis, ballparks are being built with luxuries, boosting team and local revenues.
Sports-happy America is on a stadium binge.
Huge new concrete arenas are now planned or under way in St. Louis, Washington, New Jersey, and New York. Last year, San Diego and Philadelphia agreed to build new sports stadiums.
Behind the bleacher boom is the desire of owners to add corporate skyboxes, wide malls where everything from automobiles to kielbasa are sold, and sit-down restaurants where diners can pick apart a lobster while watching players swing bats or catch footballs. New stadiums also increase the value of a franchise, especially since attendance usually increases as media exposure of the new park increases public interest - even in mediocre teams.
"Teams are now demanding their own stadiums because they want to keep more of the revenue to stay competitive, " says Rick Eckstein, a sports-stadium expert and professor at Villanova University in Pennsylvania. "Once one team gets one of these new stadiums, others feel compelled to get one themselves so they can compete for players."
On Wednesday, one of the richest sports team owners, George Steinbrenner, who owns the New York Yankees, smiled into the cameras as members of his organization, surrounded by local politicians, announced a new $800 million replacement for the House That Ruth Built, a stadium that has often been called a "cathedral to baseball." The new Yankee Stadium, to be built on land adjacent to the venerable 1923 ballpark, will have 57 luxury suites compared with the 36 corporate suites today.
But Randy Levine, president of the Yankees, says the new stadium won't be just for the rich. "We pledge the stadium will be affordable," he said at the press conference.
The Yankees' announcement was on the heels of an agreement to replace the Mets' Shea Stadium with a $600 million ballpark that will also be used for the Olympics if New York wins the 2012 Games. In addition, football's Jets are continuing to maintain that they will build a new stadium in Manhattan, even though it won't include any state financing. And real estate mogul Bruce Ratner, owner of the New Jersey Nets, is moving ahead on plans to erect a stadium and real estate development in Brooklyn.
If that's not enough, in April, the NFL's Giants said they would build a new $750 million 80,000 seat stadium in the Meadowlands.
The latest surge might be the end of the building boom for a while, says Mike Leeds, associate professor of economics at the Fox School of Business at Temple University in Philadelphia. "I think there will be a slowdown because there are only a few facilities of an age where they will be politically feasible to replace them," he says. "There has been an increasing reluctance of cities to jump in. Minneapolis has repeatedly said no to a new stadium."
That may be why the latest round of stadiums will be mainly financed by the owners. "That may be a trend as politicians wise up," says Mr. Eckstein, who believes taxpayers usually lose out on stadium deals.
Indeed, the Yankees deal shows that change. In 1996, former Mayor Rudolph Giuliani proposed 100 percent city financing. Later, it came down to 50 percent. Now, the Yankees will pay $800 million, while the city and state invest about $220 million in infrastructure, parking, and public parks.
New York is hoping that a new Yankees stadium will have a positive economic impact. Mayor Michael Bloomberg says it will result in hundreds of new jobs. And Bronx politicians envision a new high school devoted to sports issues, as well as a new hotel and convention center. However, Eckstein cautions, "There is no good study that shows a positive economic impact over time."
But in New York, where real estate is practically a religion, some think it might be a boost to the South Bronx. "It's the next natural edge of gentrification out of Manhattan," says Andrew Zimbalist, a sports expert and professor at Smith College in Northampton, Mass. "It will help other investment in the area."
Indeed, local business owners and residents are enthusiastic. "It will be better for my business," says Saeed Abdulla, owner of a Yankees souvenir shop on the Grand Concourse. His store is directly across from the new stadium site, and he says that he expects sales to rise once the new stadium is built. "Now, this area is dead," he says.
The prospect of the new complex has Devon Henry, age 18, dreaming about becoming an entrepreneur. "McDonald's, the hot-dog stands, that chicken place - business owners, they're getting the money," he says. "I'm about to try to own a business by Yankee Stadium. Open up a hot-dog stand, sell hot dogs for $7."