Thursday, February 4, 2010

Is it worth keeping the Falcons Downtown?


My knee-jerk reaction to articles about building a new Falcons stadium Downtown are that, heck yeah, the Atlanta Falcons should be in Atlanta, for crying out loud.  How would the Doraville Falcons sound?  Maybe we can call it the Atlanta-Sandy Springs-Marietta MSA Falcons?

Then I remember that there is a reason I'm a finance major.  Making decisions like whether to spend gobs of public money on a new stadium should be made on stronger rationale than civic pride.  Rather, there are tools we can use to make rational decision.  One is calculating the net present value of the investment.  I found a frustratingly opaque report on the new Yankees Stadium, suggesting the stadium has a positive NPV.  One must assume the cost of bond financing is the discount rate?

There is also a ton of work out there suggesting that stadiums aren't really worth the investment, but in my brief research yesterday I couldn't find anything with actual analysis.  Sure, these stadiums cost a lot, but if they generate comparably large returns to the city, they can be worth it.
Downtown San Diego has had a pretty positive effect from subsidizing Petco Park - it has spurred a lot of new private development near where the ULI site was recently.  Pittsburgh has an interesting relationship with the Steelers and the Pirates to leverage investment in new stadiums into new private development.  Cincinnati has a similar situation where new stadiums have been part of large urban revitalization projects.  Atlanta developers Carter and Dawson Co. are involved in that latest deal, btw.  

Obviously the value of subsidizing a project depends on everything involved.  The Georgia Dome area doesn't do very much in terms of helping out the rest of the city - it doesn't attract any other establishments near by, it doesn't draw residents, it never really drove any new private investment.  It is important for the hospitality industry, and losing the Falcons would hurt Downtown in many ways.  You would also have to assume that the Chick-Fil-A Peach Bowl and other events would follow the Falcons.

There are still a ton of unanswered questions - where would a new stadium be built?  Can it be leveraged into new private development and the ever sought after urban revitalization, or would it simply be surrounded by parking lots?  How might it fit into the City's Stadium Area TAD and the city's efforts over there?  Could a new Stadium near the Ted drive the investment in a MARTA spur line or a streetcar line to the stadium area?

This is something I'll try and dig into more, but anyone who has done work on these sorts of issues is welcome to point me in the direction of resources.  

5 comments:

  1. I'd be interested to see what you find out. What happened to the Stadium Area TAD? The site says they are not currently accepting applications for funding, and there's obviously not been anything done on the ground -- the area's commercial district (especially along Georgia Avenue) has been abandoned and deserted.

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  2. You asked a lot of questions, but you need to consider a few things. First a football stadium and a baseball stadium are two very different animals. Both in their physical nature, and in how they interact with their immediate surroundings. (That's why those multi-use stadia from the 70's failed so miserably.) A baseball park is in use on a near daily basis during the season. It can have a very lively interactive effect on a neighborhood. Think of the areas around Wrigley Field and Fenway Park.

    A football stadium is usually a once a week affair. And there is a preference by the fans to have a lot of open parking areas for tailgating. So there is a lot of down time and a lot of dead space.

    That said, the Georgia Dome has been leveraged well with the GWCC next-door. If redeveloped, it needs to be with an eye to integrate with the city better. In addition to Falcons games, there are the annual college football kick-off games, SEC championships, and Peach/Chick-fil-A bowls. Also, Georgia State will start to use the facility soon. The fans come to town for these games and some also go to other attractions around Centennial Park. So there are a lot of symbiotic relationships here. I say redevelop the Dome on the same site. Just do it better.

    Over by Turner field - get rid of the sea of parking lots and develop a mixed-use neighborhood with townhomes, a restaurant district and other shops. You may have to conceed a higher-than-normal amount of parking in decks, but you'd still be better off than with all that asphalt.

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  3. I completely agree about the difference between a football stadium and a baseball field and how they are used. The Dome probably gets more use than a lot of football stadiums because of the SEC championship game, bowl game, early season games, and even events like the Battle of the Bands a few weeks ago, or the big Donald Trump type seminar things. I don't think the Dome itself is that bad, but the whole GWCC has a real negative impact on the urban character of that side of town.

    One thing to consider about the turner field area is whether there can be significant shared parking synergies. Maybe you have to deck a lot of the parking, but the Dome and the Ted have slightly counter-seasonal usage patterns and so you don't have to host a sea of parking for BOTH stadiums. The counter-seasonal usage patterns would maybe mean more regular foot traffic that nearby businesses could rely upon. I guess basketball and baseball are better examples of counter-cyclical relationships since basketball happens more regularly than football....

    I'm not necessarily advocating for anything one way or the other right now. I think the best thing to do is put it all on the table so you can make an informed decision about the options.

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  4. The Dallas Cowboys stadium is in Arlington. That's f'd up. Atlanta please don't do what Dallas did twice: once in the '70s when they left the Cotton Bowl for Irving, and again farther west from the city to Arlington.

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  5. Not Football related but: Let find a tenant for the Dwoskin office or find out what the problem is.

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