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The Tricky Business of Making Stadiums Pay Off

Sometimes they work, producing public revenue and neighborhood development. But some of them turn out to be civic disasters. Is there a formula for mixed-use magic?

Implosion of the Silverdome
The Silverdome is imploded in 2017. Located in Pontiac, Mich., it was supposed to trigger an economic revival around the industrial town but it was too far away from Detroit to serve as a magnet. (ESPN/YouTube)
There are three items of public policy dogma that most college students learn if they take introductory economics. One is that raising the minimum wage is harmful to working people. The second is that rent controls create a shortage of affordable housing. The third is that new sports stadiums are a waste of money; even if the initial financing is private, the public ends up paying in the long run.

Not being a believer in rigid free market economics, I’ve been skeptical of all three of these propositions, and the third one continues to puzzle me. The principal argument against building stadiums is that the revenue they bring in comes largely from residents of the community that builds them, so the money is just being swirled around within the same pot. But that’s true of any new entertainment venue or practically any urban amenity, so why are stadiums uniquely guilty? I never came across a convincing answer to that question.

What’s more important, over decades of watching sports and watching cities build sports arenas, stadiums and ballparks, I became convinced that there just wasn’t a pat answer. There are plenty of new facilities that turn out to be expensive white elephants, but there are some that seem to bring genuine social and economic benefit to their communities.

If you’re looking for a civic disaster, you might start with the Silverdome, the indoor football stadium built in the 1970s with $55.7 million of mostly public money. Thirty miles from Detroit, in Pontiac, Mich., it was supposed to trigger an economic revival around the struggling industrial town. But too far from the big city to serve as a magnet, it sat virtually alone in the middle of nowhere and was abandoned in 2002 and demolished in 2017. The land is now going to host an Amazon fulfillment center.

OK, that’s one. Another is the Metrodome in downtown Minneapolis, an ugly duckling that did nothing for its neighborhood, was judged one of the worst ballparks in America (for both football and baseball), and was finally put out of its misery in 2014.

But it’s hard not to notice that during those same years, stadiums in diverse parts of America were turning out to be multimillion-dollar assets to the cities and neighborhoods where they were located. In the early 1990s, the ballpark at Camden Yards in Baltimore rejuvenated the Inner Harbor district where it was located. Coors Field in Denver jump-started an incipient revival of the city’s Lower Downtown that turned LoDo into a thriving entertainment and tourist mecca. The neighborhood around Nationals Park in Washington was a collection of empty lots when that ballpark opened in 2008; now it is the centerpiece of a lively urban community with a plethora of stores and restaurants and apartment buildings that are home to thousands of young D.C. residents.

Wrigley Field in Chicago isn’t exactly a new enterprise. Located in the drab working-class neighborhood of Lakeview (I was born there), it began hosting Chicago Cubs games in 1916. But in the last 20 years, as the Cubs began to attract a national following, Lakeview started to lure a new generation of fans, hotels and entertainment venues to support them, and a brand-new nickname: Wrigleyville. The Cubs started wearing “Wrigleyville” jerseys at some of their home games. In the wake of all this, home values in the neighborhood soared.

YOU WILL LIKELY NOTICE that all those success stories have one thing in common: They are about baseball parks. The white elephants of recent years have almost all been football stadiums. Maybe a public investment that works for baseball is a big mistake for football. Perhaps the economists have at least part of the truth on their side.

They do have one valid argument. A major league baseball team plays 81 regular season games in its home park every year. A football team plays eight. The football stadium can augment its month-after-month emptiness by hosting concerts and tractor pulls, but these aren’t nearly enough to do much for the revenue stream. So the public funding spent to build these facilities can often be described with accuracy as a waste of money. Even if the building is built at the team owner’s expense, fans end up paying for it with expensive tickets, $10 hot dogs and $16 beers.

FedEx Field, where the Washington football team plays, has been a genuine white elephant almost from the day of its opening in 1997. Located in the suburb of Summerfield, Md., inconvenient to the city, it has never attracted significant economic development of any sort. It is still in business, but the team’s ownership has been trying for years to replace it with a new facility located somewhere else — almost anywhere else.

More recently, Levi’s Stadium, built with borrowed public money 40 miles from San Francisco to host the 49ers, has been praised for its architecture but has not been much of a development success. What it has mostly generated is a traffic congestion mess and resentment from San Francisco residents that a team named for the city ought to play somewhere near it.

GIVEN ALL THIS HISTORY, it’s interesting to find that there is a burgeoning enthusiasm for creating suburban football stadiums, some built with private money and some at partial public expense.

Exhibit A is SoFi Stadium in Inglewood, Calif., built on the site of a former racetrack and financed for $5 billion by Los Angeles Rams owner Stan Kroenke. SoFi sits on a 298-acre site that is the focus of a mixed-use development that includes 890,000 square feet of retail, commercial office space and residential units. The retail space was largely spoken for even as the football field was completed. The first apartment building opened this spring.
SoFi Stadium
SoFi Stadium in Inglewood, Calif. Its 298-acre site is the focus of a mixed-use development with 890,000 square feet of retail, commercial office space and residential units. (Elliott Cowand Jr./Shutterstock)
The Las Vegas Raiders of the National Football League play in newly constructed Allegiant Stadium, financed with $750 million in public funding and $1.1 billion from the Raiders. It is located in the town of Paradise, just outside of the city, and its proximity to the Las Vegas strip eliminates most of the concerns about a middle-of-nowhere problem. Its developers tout it as a “global events destination.”

Now the NFL Chicago Bears are trying to distill some mixed-use suburban magic. They have been contemplating a move from their longtime home at Soldier Field, just south of downtown, to a new site in Arlington Heights, 25 miles from the Chicago Loop. The plan calls for a 300-acre development, with hotels, offices, parks, townhouses and multifamily housing. Maybe this won’t happen in the end — the project has hit some serious snags — but it suggests a lesson that football magnates seem to be imbibing: You can make a football stadium work in an out-of-the-way location, but you may have to build an entire community along with it. You can’t expect the stadium itself to do all the work.

THIS INCIPIENT MOVE TOWARD SUBURBAN FOOTBALL has a determined advocate in Matthew Yglesias, an urban policy critic and unabashed football fan. Yglesias is particularly incensed over efforts in the nation’s capital to replace the obsolete RFK Stadium, situated in a convenient inner-city Washington neighborhood, with a new football field on the same site aimed at doing for the community what SoFi may be doing for its enclave outside Los Angeles. Yglesias sees this as a huge mistake, whatever its dollar costs might be. He wants the RFK land used to create new affordable housing. “Football and suburbia are two great American passions that belong together,” Yglesias wrote recently. “Let the suburbs have the stadiums. Cities need housing. Pro football just doesn’t belong in the middle of a city.”

The longer you look at the stadium issue — the costs and the ultimate impact on the surrounding community — the clearer it becomes that the right answer is: It all depends. A new stadium, even one that is empty much of the year, can revive a neighborhood that is already in the process of reviving itself, as Coors Field did in Denver and Camden Yards did in Baltimore. Or it can become a costly embarrassment, as the Silverdome did in Detroit. But to be successful, it has to be part of a scheme of broader community resurgence. Governments can help with this. In fact, they usually have to help.

A major-league franchise, and often its stadium, can do things for a city that go beyond its costs and its revenue. It can make the residents feel better about themselves, and it can convince them or reassure them that they are a major-league metropolis. But it has to be done the right way. Otherwise, the baleful warnings of the economists can turn out to be valid after all.
Alan Ehrenhalt is a contributing editor for Governing. He served for 19 years as executive editor of Governing Magazine. He can be reached at
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