July 16, 2007
Can sports spur economic development?
Sports facilities like stadiums or arenas are often touted as being able to cause widespread investment and prosperity in surrounding neighborhoods, yet the record of this is really spotty. N.C. State University's Mike Walden outlines two major conclusions economists have reached when it comes to the ability of sports buildings to spark other investments.
"Economists ... have reached, I think, two major conclusions: One is that the neighborhood where you want the development to occur has to be a neighborhood that is prime for development anyway. That is, you can't expect to put a stadium or arena in a neighborhood that just doesn't have anything going for it and expect that area to be developed," the economist says. "So it has to have fundamentals essential for development, like good location, safety, perhaps adjacent to a natural amenity like a lake or a river.
"Secondly, and this is perhaps a little more economic ... results have shown that if you put one group not only in charge of building the stadium or arena but also in charge of developing the surrounding area so it's all one package, that appears to be more successful with that area being developed," he adds.
"And I think the reason is that single developer now can reap the benefits not only of the sports complex but also of the surrounding investments and surrounding development -- that the developer knows that if everything can work together, he or she will make more money.
"So those are the two main conclusions," he says, "but I think again the point here is that you can't necessarily expect just building a stadium or arena is going to be that silver bullet that will cause everything around it to prosper."
Posted by deeshore at July 16, 2007 08:00 AM