Tuesday, September 20, 2011

Ballparks have not been the indomitable economic engines elsewhere that politicians & developers make them out to be

Union Avenue outside AutoZone Park with FedExForum in background.
Photo credit: Google Maps.

After some time we are finally getting a balanced report in print on long unfolding planning for a new ballpark. On Sunday night the Nashville City Paper published a well-rounded analysis of the various views in play on this issue rather than simply repeating Mayor's Office talking points or letting pro-developer Friends of Sulphur Dell dominate the discussion.

What I want to focus on for the moment is the article's reference to Memphis's AutoZone Park, a reference often used by various ballpark development supporters to predict economic growth for our prospects. As reporter Joey Garrison points out, the communities around Sulphur Dell are thriving compared to other proposed Nashville sites. The Union Avenue stretch of Memphis where AutoZone Park was built was considered rough, rundown, ramshackle, downtrodden, and unsafe. These are hardly adjectives that could be used to describe either Sulphur Dell or the neighborhood closest to the proposed site and most affluent in the "urban core", Germantown.

Yet, the council's primary cheerleader for a Sulphur Dell project, Jerry Maynard, insists that our area provides the "biggest bang for the buck". CM Maynard has also raised hopes with wishful thinking, if not sheer speculation, that retail and residential developments would mushroom across the area with a new stadium.

Yet, the results in Memphis, where the stakes were even higher, were not as explosive as originally predicted:

Catalyst, game-changer, kick-starter, transformer — I've seen all these words tossed around, and used them myself, to describe big deals in Memphis over the last 30 years. Cost aside, and this one didn't come cheap, what makes a deal transformative? I would say longevity, positive impact beyond the footprint of the project itself, continuous upside, and love, as in "I love taking people to so-and-so."

Here's how I would rate the T-factor of high-profile projects I've seen come to be since 1980 ....

Middle Level:

AutoZone Park. Turned a sleazy, blighted part of downtown across from The Peabody into a showcase. Bigger than a ballpark, with offices, a parking garage, elementary school, and apartments. Attendance declined after the newness wore off, and the other side of Union Avenue hasn't come around.

I took a trek down Union Avenue via Google Maps and I saw a lot of properties that did not look like they were growing, that in some cases actually looked more demolished than built, that looked more like what I've seen around South Nashville near Greer Stadium. But the Union Avenue area is also supposed to have an ace up its sleeve: 3 blocks on its other side sits a major league sports arena: FedExForum, home of the NBA's Memphis Grizzlies. Even though sandwiched between minor league baseball and major league basketball, Union Avenue appears to languish after 7 years (AutoZone has been there for 10). There are also indications that the economic impact numbers that are used to promote FedExForum are artificially inflated by counting the multi-million dollar pro basketball players' payroll, even if those players do not spend their paychecks in or around the Union Avenue community.

Sulphur Dell has no major league venue, and we can assume that if AutoZone Park could not spur dramatic growth for the other side of Union with the help of a pro basketball arena, then we should not expect to see the same level of growth that Memphis has enjoyed (even though it materialized smaller than advertised). While on the subject of professional venues, I'll also point out that East Bank retail and residential growth has not run riot in the 12 years since Nashville's pro football stadium was built.

Birmingham, Alabama is exploring moving their minor league park downtown, too and the current scenario looks like it will be a boon to their Double A team while returns on the city's investment look more modest:

The city's costs include nearly $60 million to build the stadium and an accompanying Negro League museum and more than $600,000 to buy out the team's [current] lease ....

The revenue from the stadium itself won't begin to pay those costs, and it's not expected to, leaders said.

The Barons could gross $3.7 million a year from a contract that gives the team control of concessions and most of the ticket revenue and suite revenue ....

The city stands to earn about $315,000 annually from the revenue-sharing agreement with the team, according to Klein's estimates. The city also will receive $400,000 a year in rent.

Chuck Faush, [Mayor's] chief of staff, said risks have to be taken to reap long-term benefits.

"With the same guarantee that Birmingham and Jefferson County had to get together and build the [Birmingham-Jefferson Convention Complex], that's the same guarantee that we have for this stadium," Faush said.

The stadium development will be funded largely by a 3.5 percentage-point increase in the city's lodging tax, which is expected to generate about $3.4 million in 2012 ....

Howard Wial, a fellow for the Metropolitan Policy Program at the Brookings Institution, said such facilities are a great source of civic pride but are not economic tools.

"I don't see much reason to subsidize a private company where there's no spillover benefit," he said. "If people want to have a team that they can go see and really want to see it in Birmingham ... maybe it's worth something to them. But it's not a very good economic development tool."

Wial, who directs Brookings' Metropolitan Economy Initiative and conducts research on urban and regional issues, cites Camden Yards in Baltimore as a warning. That city and state poured millions into the facility, which was touted as a way to revive the surrounding area when it opened in 1992. That resurgence hasn't occurred, and the city is still paying for its state-of-the-art stadium, Wial said.

Besides the rather small returns on the Birmingham concept, what North Nashvillians should take note of is that even Baltimore's iconic yard has failed to deliver the growth after nearly 20 years of operation. What other Nashvillians should notice is that Baltimore is still paying for unrealized Field-of-Dreams promises.


  1. The stadium should remain where it is. Dollars would be much better spent on improving it.

    The location is great. For those who complain about parking there, well, parking is always a hassle.

    As far as the tourism argument, it should not be part of the economic equation.

    Tourists will NEVER come to Nashville just to see a minor league ball team. Tourists come here for music and a good time (They come for the Nashville experience).

    Tourists DO come to see the Preds and Titans. But these are major league teams, and often, the tourists who come are fans of the visiting team. I don't think minor league fans follow teams to other cities.

    The fans also come here because of The Nashville Experience. (I know many people who have come to Nashville from Chicago or St. Louis to see the Blackhawks or Blues play the Preds one night and see a concert at the Ryman the next).

    The fact is, the current stadium does NOT keep people from attending Sounds games.

    A new stadium will not magically increase the number of people who attend games (in the long term).

    Like Vanderbilt football, if the team starts winning, THEN people will start attending.

    Let's fix up our current stadium. I'm all for it. But a new one?

    Who is gonna get rich off of that?

    (Just take a guess or two).

  2. As I have posted many a time:

    Organic growth is what we should support.

    The 12th Avenue South District happened without major city initiatives.

    I have lived a block away from it for 15 years. I have seen it happen with my own eyes. It happened with small business owners seeing an opportunity and taking a chance.(Mafiosos, Frothy Monkey, Portland Brew, Burger Up, the custom jeans place, the popsicle place, etc. And it all started with Laurel's moving from 2nd Ave to 12th Ave. S., for those of you with a memory).

    Where the city DID help in this area is with sidewalks, lights and fixing up Sevier Park (These are the kind of things government is supposed to do).

    Now let's throw in East Nashville:

    East Nashville has been "happening" for 25 years. My first boss bought a house near Five Points with his partner when all of East Nashville was a "dump" back in 1983. They saw the opportunity. I had other friends buy homes there in the 1980s as well.

    Mike Grimes, opened his music club there, which paved the way for Three Crow Bar, Red Door East and others. It all happened organically, without any big developments from the city administration.

    Remarkably, the tornado that hit East Nashville helped a lot. I've heard many people say, that after the tornado hit, the people who came to help ended up moving into East Nashville because that is how the discovered it. (Funny, some say they regret the tornado, not for the destruction, but for the fact everyone found out about East Nashville).

    Even Lower Broad owes its success to organic growth. Who owns the clubs? Individuals. Who owns the clubs of Printers Alley? Individuals.

    Again, some mayor did not create these aforementioned areas. Nor did a bunch of developers and elites who think they are hip come up with these places. They happened on their own.

    All that said, I agree with Anonymous above.

    We don't need a new stadium. Let's build upon what we have. And let's have some patience.

    It has worked with the 12th South District, East Nashville and Lower Broad.

    The notion that building a new minor league stadium will create places like I mentioned above is an absolute joke.

    We need to get over this stadium crap.

    Hell, we just built a football stadium AND a hockey arena. Let's take a break.

    I wanna see Mayor Dean fix the pot holes in the Hillsboro Village and Belmont area before he can convince me a new stadium will save and create a neighborhood.

    (Maybe I need to get Megan Barry on those pot holes).

  3. Having just now seen this article and Memphis citizen, I feel the need to correct a few things. You've mentioned that the economic impact on the FedExForum was "artificially inflated" by using the basketball team's payroll. The economic impact was intended to show the impact of the Grizzlies organization, with the FedExForum being the facility that they are housed in - a corporate headquarters.

    Memphis is also not a city that can be compared to Nashville. Our economies are different, as are our neighborhoods. I wish you had taken the time to talk to a resident or two because you might have learned that Memphis' neighborhoods are mixed. It's not just poor people and condemned buildings concentrated in one area. Blight can occur in the fringes of a multi-million dollar neighborhood. If you've ever been to Chickasaw Gardens and Orange Mound, you'll see what I mean. Chickasaw Gardens median homes values are $750,000+ while Orange Mound hovers in the $20,000 range. These two neighborhoods are only separated by a street.

    Also, you fail to mention that every in the US is and has experienced a downturn since 2007. Especially Memphis, we've seen a steady out-migration of people since 2000 and that migration deepened in 2008 and 2009, in part due to the economy: job losses, foreclosures. So no, our downtown has been growing as fast as you might think it but you are forgetting that it takes money to grow and if there's no money in municipal budgets to demolish or refurbish, then it's not going to happen. This would be a much better post if some reality had been considered.