Is stadium key to RSL success?

(by Amelia Nielson-Stowell desnews.com 5-6-06)

As Dave Checketts said Saturday, "We are a long, long, long, long, long way from throwing in the towel on Real Salt Lake."

The team owner's confirmation that Soccer City, USA, will still be built in Sandy, Utah, comes after three days of relative silence from Utah's first Major League Soccer team. Last Wednesday, the county pulled $35 million in hotel room tax funds because it would end up costing more than double that amount in interest. Although it's another "necessary" bump in the project, Checketts said in a Saturday press conference that he plans to continue negotiations with the county to find a way to make stadium financing work.

Real still hopes public dollars will fund $45 million of the proposed $145 million, 22-acre stadium project. Team officials say the facility will bring jobs, economic benefits and notoriety to the state, but will Soccer City, USA, live up to team officials' promises?

Glowing expectations of economic development surround the stadium and adjoining hotel and broadcast studio, but after documents leaked last month to the Deseret Morning News revealed Real is losing millions, one fact shined through: Real needs a stadium to make money.

Major League Soccer hopes to have a stadium for each team in the league. By 2010, when the 12-team league is expected to expand to 16, nine soccer stadiums will have been built across the United States and one in Toronto, Canada. Teams with stadiums turn a larger profit than those without, said MLS Commissioner Don Garber. Currently, the Los Angeles Galaxy, who play at their own stadium in Carson, Calif., are the only team making a profit, he added.


Every MLS stadium currently operating or being built has been funded with some form of public dollars, whether it be donated land, environmental cleanup or multimillions from the government. Real officials have continually said a stadium cannot be built without some form of public funding. Their plan is to use those dollars for infrastructure costs, rather than work on the stadium itself.

The team has optimism on their side. Coming off a losing season, Real has enjoyed a strong fan base in Salt Lake City, the smallest market in the league. And with three successful MLS stadiums, that could slate Sandy to receive the same kind of economic benefits. But regardless of how the Sandy stadium is financed, officials and residents wonder whether building it will truly bring windfalls to the well-established suburb.

The majority of research focusing on stadium projects paints an unfortunate picture for cities, particularly for those that pitch in public money for a private, major-league team. Stadium funding projects are given kind words like "public-private partnership" from team owners, but some analysts contend that most stadium and arena projects turn out to be sweetheart deals for the professional sports franchises, which get rich off the public dollars.


University of Maryland professors Dennis Coates and Brad R. Humphreys found in their 2000 study that in contrast to claims of stadium advocates, the consensus in academic research has been that "the overall sports environment has no measurable effect on the level of real income in metropolitan areas.

"Our own research suggests that professional sports may be a drain on local economies rather than an engine of economic growth," they said.

But James Wood, director of the Bureau of Economic and Business Research at the University of Utah, said stadiums can foster economic development — for the host city.

"It will probably come at the expense of those other cities where (fans) are from. It's more of a redistribution. That's the issue," Wood said.

Local restaurants will do better on game nights, but dollars are redirected when a new entertainment facility comes to town. Because most people have a only certain amount budgeted for entertainment, fans spending money for an evening at the game don't spend their money elsewhere.

"If the stadium simply displaces dollar-for-dollar spending that would have occurred otherwise, then there are no net benefits generated," Coates and Humphreys said.


In order to have an impact on the state, soccer games would have to attract out-of-state visitors, Wood says. Locally and across the state, economic impacts would happen if spending occurred that would not have taken place in the absence of a stadium.

Real says that would happen, and refers to last July's USA vs. Costa Rica game held in Salt Lake City. Approximately 15,477 out-of-state visitors brought a $12.7 million boost to the economy.

"Second only to the Olympics," the team's press release said, "the World Cup Qualifier game between USA and Costa Rica was the largest international sporting event ever hosted in Utah."

Naysayers of Real point to Franklin Covey field, where neighborhood revitalization and economic development was promised. The area has remained primarily industrial. But the E Center in West Valley and Delta Center in downtown Salt Lake City have drawn business to their surrounding neighborhoods.

Wood said each stadium's viability is different. Sandy is a suburban community of 90,000 that is in a rapidly growing area of the county. The stadium will also sit in a well-established retail area, anchored by Jordan Commons to the north and South Towne Mall and Expo Center to the south.

"I think the stadium in Sandy is going to be very much like what's happened with the E Center: a conglomeration of commercial activity," he said. "It's the reason I think Sandy has pushed very hard for it. Sandy will benefit, just as the E Center has benefited West Valley."

The three cities that already have MLS stadiums say they have seen economic benefits and spin-offs from having a professional soccer team in town. And part of the key to the successful stadium is MLS's plan for all stadiums: creating multiuse facilities.

The Home Depot Center in Carson, Calif., is a prime example of a multisports complex. The stadium was part of a $150 million project to create an Olympic training center, which includes a 13,000-seat tennis stadium, 20,000-seat track and field venue and a velodrome for cycling.

In addition to being home to L.A. Galaxy and CD Chivas, the stadium also plays host to the Adidas Running Club, USA Elite Running Club, the national X-Games and local high school and collegiate games. Bands like Green Day and Dave Matthews also play in the 27,000-seat stadium.

"It does marketing for the city," said Carson's economic development director Lance Burkholder. "We get people to visit Carson and drive through our area that have never been here before. It's a multisports complex that gives us more recognition in the television, newspaper, radio — at least once a week."


After Carson tried unsuccessfully for years to attract Target to an old pavilion, it took the soccer powerhouse for Target to reconsider their original offer. The Home Depot Center opened in 2003 — Target signed a lease that same year.

"The people from Target were so impressed with the stadium," said Burkholder, "that they built a Target here and it opened last October. There's a direct relationship between the Home Depot Center and the retailer wanting to be here. It would have never been here if it wasn't for the notoriety the Home Depot Center has brought us. Retailers see us as a great place for the future."

Real's Sandy stadium is on the same track. Real plans to host 15 concerts a year and one international soccer event. Beyond college and high school soccer and lacrosse games, outdoor expos and community events, the 22-acre stadium is the centerpiece to a 136-acre massive development in Sandy. The city plans to zone the entire area to an entertainment district. Real's Checketts said Saturday that the team is working with a master developer to put in housing units, retail shops and restaurants.

A major-league soccer stadium can also help make a city a more attractive place to live, as was the case for Ohio's Columbus Crew Stadium, the first MLS stadium to be built. After a city referendum failed to allow a stadium on the former site of the Ohio State penitentiary, soccer officials looked toward an old brownfield near the state fairgrounds.


Once home to an auto-parts manufacturing factory, the grounds were the "poster child for urban blight," said James Schimmer, Columbus' administrator for economic development. "It was kind of a nasty place. The stadium helped facilitate redevelopment of that property. . . . It's been good news for that particular area."

In addition to curing a dilapidated cleanup site, the stadium, where the Columbus Crew plays, has helped revitalize Columbus' downtown. Across the street from the stadium sits the brand new shopping center, Crewville, with numerous restaurants and a Lowe's Home Improvement store. Schimmer said the stadium has even breathed new life into the neighborhood's housing market.

The newest MLS stadium, Pizza Hut Park in Frisco, Texas, has seen similar effects with a multiuse facility. Both the U.S. Youth Soccer League and North Texas Youth Soccer Association have moved their headquarters to Frisco since the opening of the stadium, which is home turf to the MLS team FC Dallas.

The 120-acre complex has 17 tournament-grade fields, including one surrounded by grandstands that is solely for use by youths from the local school district. And over the next couple of months, country greats George Strait, Kenny Chesney and Rascal Flats will all play in Pizza Hut Park.


"We certainly see it as a major business investment in our community," said Jim Gandy, executive director of the Frisco Economic Development Corporation. "We're basically here on the flat back-lands of North Texas. In order to create a tourism and visitor industry, we needed to do something to create a visitor industry. So we went after sports teams."

A strong case can be made for the kind of image a major-league franchise provides a host city. Two economists at the Federal Reserve Bank of Kansas City, Jordan Rappaport and Chad Wilkerson, have argued a new quality-of-life may even justify large public outlays for stadiums.

"When quality-of-life benefits are included in the calculation, public spending may not appear to be such a bad investment for some metro areas," they said in a 2001 report.

A stadium is something to point to "in terms of civic pride," the U.'s Wood said. "The don't have great impact on the bottom line. But they're important, and that's what cities are about."

And for Sandy city, the south valley suburb wants that same recognition.

"I think there is no question that it will have an economic benefit on our community," said Randy Sant, Sandy's economic development director. "People will know where Sandy, Utah, is. Here you are, home of a major league franchise. That by itself gives you some economic value that's difficult to put an economic dollar to."