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Are stadiums good for downtown development?

On Behalf of | Feb 7, 2018 | Development |

In many ways, the death of downtowns as shopping districts came long before the death of shopping malls. Some may say malls triggered this decline. However, innovative California cities have revitalized their downtowns by making them multi-purpose, combining business, work and entertainment to create a hub of social interaction. Now, a new idea to encourage development is gaining traction, and that is bringing professional sports stadiums into the heart of the city.

Building stadiums in the downtown districts has many benefits. First, it attracts other developers to bring their projects to the city. This encourages new investment in the area and boosts employment; in one city, employment grew 38 percent during the construction of a new stadium. Cities with convenient, quality public transit systems may benefit most from this, drawing visitors who will then stay in local hotels and spend money in downtown retail and restaurant establishments. Stadiums also increase pedestrian traffic, in some areas as much as 10 percent, which is good for surrounding businesses.

While the benefits seem many, there is always the issue of the tax burden a new stadium may place on the citizens of the city. Typically, about $13 billion of the average $28 billion needed to build a stadium for professional sports comes directly from tax-exempt bonds that the public funds. Some municipalities are looking at innovative ways to spare the public heavy taxes, including downtown hotel taxes and parking revenue surrounding the stadium.

What seems to be certain is that the construction of a stadium in a California downtown stirs up excitement in all areas of development. Stadiums spike the demand for business real estate and high-end residential properties. Developers and investors hoping to get in on the boom in downtown areas would benefit from discussing the potential with an experienced attorney who is knowledgeable of the current trends.

Source:, “Can stadiums save downtowns – and be good deals for cities?“, Patrick Sisson, Jan. 30, 2018