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Spinoff of downtown stadium depends on ‘destination’ appeal

If a new football stadium is built downtown, it would be hard not to become excited about a major sports and entertainment district.

After all, a football stadium would add to already existing venues within walking distance of each other – First Niagara Center and HarborCenter, the Seneca Buffalo Creek Casino, Canalside and Coca-Cola Field.

Maybe even a convention center could be incorporated into the stadium design.

But exactly how much – if any – economic spinoff is actually generated from the construction of a new sports stadium?

The three best stadium sites in downtown Buffalo – the Cobblestone, Exchange Street and South Park sites – have the potential to create millions of dollars in additional development, the new consultant report contends. That would not only include infrastructure improvements around the stadium, but also hotel rooms, retail space, bars and restaurants, the report speculates.

That’s a controversial conclusion, to be sure.

Several sports economists say stadiums make for bad economic drivers.

In fact, the consultant – the Los Angeles-based architectural firm AECOM – agreed in the case of the Orchard Park site, which lacks the potential for economic spinoff because of access and its remote location.

But the consultant and others believe economic activity can flourish downtown with all the other venues so close by – as long as there’s a well-planned and coordinated effort among the Buffalo Bills, the city, county and state.

“I think stadiums that stand alone are certainly much more difficult to create economic activity on a sustained basis,” said Mayor Byron W. Brown, “but I think when they are aggregated with other economic drivers, it really can accelerate the economic activity.”

John Cimperman is a believer, too.

He’s seen it happen, in Los Angeles.

Cimperman – principal at Cenergy Communications, a sports and entertainment marketing company in East Aurora – was head of marketing for the Los Angeles Kings during the birth of the Staples Center and adjacent entertainment complex, L.A. Live.

“That wasn’t about building an arena, it was about building a destination,” Cimperman said. “The arena was the catalyst.”

Not to be underestimated is how a new stadium adds to that growing list of good things happening around Buffalo, said Nellie Drew, who teaches sports law at the University at Buffalo.

That’s not always taken into account in this discussion over stadium economics, she said.

“It helps us turn the corner. It helps make us a destination place people want to come to,” Drew said, “and I don’t think you can put a dollar value on that.”

Uses beyond football

Drew, Cimperman and Brown believe there’s another important factor when considering the potential for economic spinoff: The type of stadium built.

“Those who are building stadiums now are looking at facilities that can be used throughout the entire year – and more than just football or baseball, or whatever the sport is,” Brown said.

That’s the business model in today’s world of $1 billion venues. NFL owners are eager to get more than just 10 games of use out of their stadiums.

That way, the teams get to keep all of that venue revenue as opposed to the gate revenue, which must be shared with the rest of the league, explained sports economist John Vrooman.

For example, at Levi’s Stadium, new home of the San Francisco 49ers, you can buy a ticket to tour the Niners Hall of Fame or experience what it’s like to be on the field.

The Minnesota Vikings are getting a new stadium in 2016, but the venue in Minneapolis will be built to host everything from an NCAA Final Four to marching band competitions.

At Arrowhead Stadium in Kansas City, you can rent out banquet space for a wedding or party.

M&T Bank Stadium plays host in the offseason to the other football – European Premier League teams brought in to Baltimore for a soccer match.

In New Orleans, the annual Essence Music Festival is held in Mercedes-Benz Superdome.

Meanwhile, Lucas Oil Field in Indianapolis and Edward Jones Dome in St. Louis play a big part of the convention space offered by the two cities.

A convention center – long talked about as a need for downtown Buffalo – was not specifically addressed in the consultant’s report, but a person familiar with it said each of the three sites would have room to incorporate convention space within the stadium design.

And there certainly would be plenty of opportunities for Buffalo to host other events, said Patrick Kaler, president of Visit Buffalo Niagara.

“I think it goes back to what is the purpose and the overall use plan for that stadium,” Kaler said. “If it’s just something that is going to be used for 10 games a year, it’s probably not a big economic generator. But if it’s something that can be used more often, then that comes into play.”

That’s why much of this conversation about the economics of a new Bills stadium will center around another key question: Build an open-air stadium or a dome?

“While domed stadiums can support a much larger number of events and create value both for the venue and surrounding ancillary development, they also cost significantly more to construct and maintain,” the report said.

A zero-sum game?

But time and time again, economists have dismissed the argument of economic development as a rationale for handing over millions in public dollars to help franchise owners build lavish venues.

“NFL stadiums are notoriously bad economic-development anchors because the economic spinoffs are zero-sum at best,” said Vrooman of Vanderbilt University.

“If the argument is being put forward that there’s going to be ancillary benefits and job growth discount all of that completely. There’s no evidence that they ever happen,” said Dennis Coates, a professor of sports economics at the University of Maryland, Baltimore County. “What I and many others have found is that using stadiums with the intent of them being economic-development tools is not effective.”

Bars and restaurants may very well spring up around a new stadium, Coates said.

The problem is that a new stadium isn’t increasing the region’s economic activity – it’s just reshuffling it, he said.

For example, Bills fans who go to a bar in Orchard Park or Elmwood Avenue after the game might now go to one next to a new downtown stadium.

“They’re not actually doing more economic activity than they used to,” said Coates, a Western New York native. “They’re just doing it elsewhere.”

In fact, the NFL stadium of today is being designed to capture all that potential spinoff – bars, restaurants, team stores – within the venue itself, Vrooman said.

“This is precisely why monolithic NFL stadiums are potential pubic-funding sinkholes, and why they should be located on the cheapest, but relatively convenient parcel of land available in Western New York,” Vrooman said in an email to The News, “Locating the venue to maximize economic spinoffs doesn’t make much sense when there are zero spinoffs to begin with.”

News Staff Reporter Mark Sommer contributed to this report email: jrey@buffnews.com