BOSTON – The shelves were stocked with food and liquor. Signs hung over each of the grocery aisles. A pair of lobsters crawled in a tank. An adjacent ice case would soon be filled with seafood. The last time Charlie Jacobs walked through this store-under-construction, it wasn’t nearly this close to done. But now this Star Market was almost finished. Jacobs was pleased.
“This is the largest grocery store in downtown Boston,” said Jacobs, who wore a black construction hard hat affixed with the logo of the hockey team he runs, the Boston Bruins. Jacobs’ family is the owner of the Buffalo-based Delaware North Cos., an international hospitality, entertainment and concessions company with more than $3 billion in revenues. Delaware North owns and operates the TD Garden, and company Chairman Jeremy Jacobs – Charlie’s father – is the longtime owner of the Bruins.
But why would Charlie Jacobs, as CEO of a National Hockey League team, be excited about a 60,000-square-foot supermarket?
Because nowadays, that’s what sports executives do. They don’t just run teams, arenas and stadiums. They have a greater charge: build communities around those places, and not just because it’s a healthy thing to do for the cities in which they play.
It’s also healthy for their business.
That is happening in New England, where the Jacobs family is working with the development company Boston Properties on a $1.1 billion project called the Hub on Causeway. The multiyear project includes the construction of high-end apartments, office space, restaurants, a hotel, concert hall, cinema and this Star Market grocery adjacent to the TD Garden. Think of it as a scaled-up version of Buffalo’s LECOM Harborcenter, the $200 million project built by Bills and Sabres owners Terry and Kim Pegula. LECOM Harborcenter’s ice rink, Marriott hotel and restaurants and retail have made it a year-round center of business, even when the adjacent KeyBank Center has no sporting events or concerts.
There’s a strong possibility that more construction – maybe on a new site, maybe on an existing one – is in the Pegulas’ future. The Buffalo Bills’ lease on New Era Field in Orchard Park expires in 2023, and the team is studying possibilities for the construction of a new stadium or the renovation of the existing one. In a telephone interview last week with The News, Kim Pegula didn’t offer indication on which way the team is leaning. “It’s way too early to even talk about which one is better or not,” she said.
But she did acknowledge the importance of building a community around a new or renovated stadium. It’s happening in cities from San Diego to Atlanta to Green Bay and now Boston. Green Bay aside, those markets are decidedly larger than Buffalo, and the scope and cost of their projects may be, too. But the concept applies everywhere: Sports teams need to generate revenue year-round, and monetize every possible space in their facilities. “That’s what we’re in the job of doing,” Jacobs said in Boston.
It’s true in Buffalo, too.
“As you see facilities being built – certainly stadiums and arenas, these large, costly venues – you have to look at it that way,” Pegula said. “You have to (consider), 'What are the other, multiuses? What are some other benefits for your fans to engage with not just on game day, but throughout the whole year?' ”
Pegula then added another factor the Bills are considering as they evaluate ideas: How would a new or renovated facility help the team connect with people who are not fans and who are not buying tickets?
“How are you affecting and making an impact on your community?” Pegula said.
This a key element of the thinking sports teams are now employing. Modern mixed-use stadium and arena projects are designed to capture – and monetize – the interest of people who may not be sports fans. They also are targeting businesses seeking office space, healthily compensated professionals looking for trendy places to live, and people – especially millennials – who like to gather in crowds and enjoy a drink with friends.
Team owners "are trying to look for new ways to generate revenue outside the wall of their venues,” said Don Muret, senior editor with the trade publication VenuesNow, noting that this is especially prevalent in the NFL, where stadiums often host fewer than a dozen games each year.
“That’s why these entertainment districts and mixed-use (developments) are popping up, and are really part of every project out there,” he said. “It’s the idea of creating a community outside the facility and developing some critical mass there.”
That’s why Pegula consistently uses terms such as “community” and “engagement” when talking about a stadium project. It’s why Charlie Jacobs is excited about projects like a grocery store, which will help make the area around his family’s arena more attractive to the people who may rent the luxury apartments he is building.
It’s also why it can be difficult to discern the difference between a big-league sports team and a big-time developer.
'Creating a destination zone'
One of Delaware North’s top executives, Maureen Sweeny, spoke on a panel in the spring at the CAA World Congress of Sports, a convention hosted by the trade magazine SportsBusiness Journal, where several hundred agents and executives gathered in Southern California. Sweeny talked about the future of the sports business and was flanked onstage by executives from the ticketing, gaming and racing industries.
The host of the session was a journalist from SportsBusiness Journal, who said teams have become interested in mixed-use development "almost to the point where they’re accused of being a real-estate company that happens to have a team, as opposed to a team that is getting into development.”
He looked to Sweeny, who is Delaware North’s executive vice president and chief development officer, noted the Hub on Causeway project, and asked, “Where is this sports-facility-as-town-center concept going?”
“We’re creating a destination zone,” Sweeny said, “for not only folks that are going to go the game, but to enjoy more than just the game.”
It's far beyond the game. People can be entertained there, yes, but they can also set up their careers and even their personal lives there. That was apparent earlier this month when during a tour of TD Garden – where renovations were being finished – and the Hub on Causeway, which has projects that are open and several still under construction. They include:
• A 15-screen ArcLight Cinema; a 25,000-square-foot sports bar; a separate food hall with 18 vendors; and an entertainment complex that includes a Guy Fieri restaurant, event space and a concert venue for an audience of up to 1,500 people. All of these are slated to open by the end of the year and are outside the TD Garden, meaning that fans can show up for a big game, even without a ticket, and find ways to become part of the scene. “There’s this communal phenomenon of saying, ‘I was there,’ ” Jacobs said, mirroring the point Sweeny made earlier this year. “ ‘I may not necessarily have been in the arena, but I was there to share the experience.’ "
• A 38-story residential tower with views overlooking downtown and Boston Harbor. The 440 apartments range from $2,300 per month for a 400-square-foot space to $10,000 per month for a three-bedroom penthouse. The first tenants move into apartments next month, and the Star Market grocery opens this week.
• An already-open citizenM boutique hotel, where an inflatable Stay Puft Marshmallow Man (a la “Ghostbusters”) is among the pop-culture trinkets that greet visitors inside the doorway. The citizenM rooms are small and podlike; the spacious lobby is filled with tables and chairs for communal gatherings.
• Office space for the software company Rapid7, which moved in over the summer, and the 31-story Verizon Office Tower, which will open in 2021. The type of workers that those tech companies attract adds to the community the Bruins are creating. On the day of The News’ visit, one of Jacobs’ top aides noticed the Rapid7 workers piling into the office. “They’re all in their 20s and early 30s with their backpacks on, coming in,” said Chris Maher, a vice president with Boston Garden Development. “The vitality, you can just kind of feel it. It’s so cool. And they’re going to live in these buildings, and take part in going to the movies and the live music.”
• Inside the Garden, Delaware North and the Bruins have invested $100 million in renovations that include new seating, retail space, smart turnstiles for premium tickets that direct fans to specific elevators and speed up “street to seat” time, new flooring, and several other improvements. Among those on Pegula’s radar is the construction on the upper levels of premium standing-room only spaces, where fans can purchase a membership that allows them to watch the game from a clublike area without an assigned seat.
Pegula has seen such standing-room areas in several venues – especially hockey arenas – and likes the flexibility they offer.
“It helps you capitalize on your venue, and be adaptable and change,” she said. “If five years from now the trend is something else, you haven’t totally committed that area to something that you’re going to have to take away.”
Two venues, many options
The ongoing Bills stadium study extends beyond the football team. The Sabres’ lease at KeyBank Center expires in 2025 – two years after the end of the Bills’ lease – and Pegula is considering options for both venues.
Preliminary as it is, the takeaways gleaned from her recent interview with The News are similar for both sports.
• Year-round operation translates to ongoing marketing and monetization. Delaware North’s Hub project is doing that in Boston. Pegula Sports is doing it with LECOM Harborcenter. “Providing something outside of game day, I think, always increases the value of your brand to non-fans,” Pegula said, “and people that aren’t necessarily coming to your game.”
• A strong technological infrastructure is vital. That connectivity is essential for current and future technologies that helps fans watch the game. It will also make mobile-phone sports betting more accessible, if New York legalizes it. Pegula Sports has lobbied for that legalization, in part because sports betting will engage fans who might otherwise not be paying attention to the Bills or Sabres. In "trying to constantly fight for that fan, and for those fan dollars, I think technology is going to be very important,” Pegula said. “How technology makes the experience of coming to a game is going to be very important. That really starts behind the walls and making the connectivity is there.”
• The Bills and Sabres’ fan bases have a wide age range, and the amenities inside and outside a new or renovated venue need to reflect that. “Our fan base is so diverse,” Pegula said. “I talk openly about having fans come up to me that are 5 years old, and nuns that are 95 years old.” The challenge, then, is to appeal to both. Pegula said that a focus for a new facility will be creating ways for fans both old and young to experience “greater moments.”
• Both teams have a strong sense of history. An arena or stadium in Las Vegas can be flashy. A facility in Buffalo, however, needs a deeper sense of grounding. “Vegas should be a Vegas venue, but that’s not going to work in Buffalo,” Pegula said. “I want Buffalo to be its own place.”
Pegula referred to fan conversations where people spoke “fondly” of the now-demolished Aud (the Sabres’ Buffalo Memorial Auditorium) and the also-gone Rockpile (the Bills and Buffalo Bisons’ War Memorial Stadium). She wants to find a way to reflect a respect for legacy.
“I want to make sure we don’t get too far advanced in these new places that you lose the character of these buildings, and some of those special moments,” she said. “We just have to make sure we don’t get too far along the road into building something that’s really not who we are.”