What’s wrong with dreaming big?
In a Dec. 28 editorial, The News & Observer answered this painfully vague question with an unflinching, resounding nothing. The big dreams of which the N&O‘s editorial board offered a full-throated—if perhaps premature—endorsement are focused on the further revitalization of downtown Raleigh: specifically, a new arena or stadium on downtown’s southern edge.
“Such places have become economic catalysts in many cities where they have spurred retail and residential construction,” the paper opined. A news piece published the previous day laid out a beautiful scenario: “Imagine driving up South Saunders Street and, as you close in on downtown Raleigh, being greeted by a shiny, new athletic stadium.”
Who could argue with an “economic catalyst,” and a shiny one at that?
The idea first emerged in the city’s 10-year downtown experience plan—the final version was released in September in partnership with the Downtown Raleigh Alliance and other groups—as part of a larger revitalization package. Indeed, other downtown boosters have pitched even more upgrades, including an expansion of the performing arts center.
In the plan, the stadium/entertainment complex is cited as a “new citywide destination in the heart of the district” that would allow the city to make the area more walkable and provide easier access to parking. It’s also mentioned as a destination for “potential rail-based transit” in the corridor between the arena and several (imagined) hotels, retail locations and office buildings.
The end result, proponents say, will be a world-class downtown with amenities that rival those of bigger cities like Austin. And the stadium could be just the catalyst downtown needs.
“This could be a great idea indeed,” the N&O argued, “providing a venue for everything from amateur sports to Carolina Hurricanes hockey to N.C. State basketball.”
One problem: Neither of those teams has any interest in relocating from the PNC Arena in the foreseeable future.
Of course, right now this is all more aspirational than concrete. “It was put in the 10-year downtown plan as an idea, and this was meant to be an idea even past the 10 years, but it’s not something I’m aware of is being worked on,” says Downtown Raleigh Alliance planning director Bill King, who worked on the plan*. “In terms of an arena, PNC has a good amount of life left in it. … There’s not any momentum to build a huge new stadium or arena downtown anytime soon.”
“We don’t have a program, we don’t have an identified end user, we don’t have any idea of how much it would cost,” echoes city planning director Ken Bowers. “There would be much more to do before any such venue could be built in downtown Raleigh.”
That’s certainly true. But it’s also true that such venues are aspirational until they’re not. Versions of this story have played out in city after city in recent decades. Elected officials and civic boosters decide a stadium is needed, and then they make it happen. And they’ve been remarkably successful. As Richard Florida noted in The Atlantic last year, over $12 billion of the public’s money has gone into building stadiums for NFL teams alone—not including taxpayer-subsidized NBA, NHL, MLB, MLS and college facilities.
With this new stadium or arena already championed by the media outlet with the region’s largest megaphone, it’s no stretch to say the wheels are turning. But before Raleigh gets in too deep, it’s worth asking whether we need this thing. For that matter, do we even want this thing?
When you scratch the surface, there are lots of reasons why we might not.
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This isn’t the first time there’s been a buzz about a downtown arena. In 1983, Mayor Avery C. Upchurch commissioned a group to find a new home for the 34-year-old Reynolds Coliseum. The study concluded that putting the stadium downtown was “impractical.” Since then, the city has gotten its first professional sports franchise, the Hurricanes, and, in 1999, the $158 million, 19,000-seat PNC Arena was built to replace the aging coliseum. State and local taxpayers covered more than half the cost. N.C. State chipped in $22 million; the Hurricanes contributed $20 million.
If a new arena is built downtown, it’s unclear who would use it. The Hurricanes are committed to the PNC Arena through 2024, or at least until the NHL decides to pack up the team and ship it off to snowier pastures. (The team’s average attendance of 11,131 is by far the lowest in the league.) Likewise, an associate athletics director for N.C. State told the N&O that the university’s men’s basketball team “wasn’t interested” in moving.
If the city built a stadium instead of an arena, it might find an anchor tenant in the Carolina RailHawks, a team that currently sets up shop in Cary and whose owner, Steve Malik, has expressed interest in moving downtown. (The RailHawks declined to comment for this story, though a spokesperson asked the INDY to “reach out to us again in the upcoming months.”)
An MLS-ready stadium built in an innovative way that connects it to the community could be a worthwhile investment, says Matt Tomasulo, a member of the Raleigh Planning Commission and founder of Walk [Your City].
“I would argue that there could be a stadium for the RailHawks, but it doesn’t have to be exclusively a stadium,” he says. “Housing is often tied into it in order to cover the cost of that other investment, and that’s a premium product. The cities that are going to thrive in the future are creating some really creative products and new projects that challenge the status quo.”
But that would likely require a considerable public commitment. While the San Jose Earthquakes privately funded their new $100 million stadium—and Orlando City Soccer is doing the same for its forthcoming $155 million facility—this is an anomaly. Of the first 15 stadiums built specifically for MLS teams, 12 received substantial help from state and local governments.
The fascination with shiny new toys for sports franchises is nothing new to American cities. Since the “building boom” started at the tail end of the last century, there has been an explosion of new stadiums and arenas built for nearly every team in the “Big Five”—the NFL, MLB, NBA, NHL and MLS.
The consensus among economists, however, is that spending public money on professional sports facilities is a bad idea, and we’ve known this for some time. A Federal Reserve Bank of St. Louis study commissioned in 2001 said as much, and financial nightmares like National Park—which cost Washington, D.C., nearly $700 million—have only bolstered economists’ position. (One survey from 2009 found that 85 percent of economists believe governments should discontinue stadium subsidies.)
Still, in recent decades, says sports economist Victor Matheson, a Holy Cross University professor who has written extensively about stadium financing, “95 percent of teams in the Big Five have gotten new stadiums, and on average, about two-thirds of the cost has been borne by taxpayers. [But] more recently, since the Great Recession, we saw a significant slowdown in the number of new stadiums built, and a reduction in the percentage being covered by the taxpayers.”
Nonetheless, taxpayers can still find themselves on the hook. Civic leaders tend to push these proposals by promising that the arena or stadium will bring a windfall to its new neighbors.
“If you’re talking about very, very localized neighborhood development—within, at most, a quarter mile of the stadium—we have definitely seen arenas going into cities and causing some very localized revitalization at times,” Matheson says. “That being said, we never really see any greater effects to the region as a whole. You’re not really generating economic activity. You’re just shifting it from one region to another.”
What he’s referring to is known as the “substitution effect.” As Matheson and a colleague explained in a 2011 paper: “While it is undeniable that sports fans around the country and around the world spend significant sums on spectator sports, in the absence of such entertainment opportunities, their spending would be directed elsewhere in the economy. A night at the ballpark means more money in the players’ and team owner’s pockets, but it also means less money in the pockets of local theater or restaurant owners.”
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No matter who pays for the stadium, another issue is at play: These massive structures, which gobble up 15 acres or more of downtown real estate, have the potential to adversely affect people who live nearby.
Anti-gentrification activist Octavia Rainey, for instance, argues that a new stadium could displace residents of a nearby public housing project with over a hundred units.
“Where it would be located, that’s right in proximity to Heritage Park,” Rainey says. She points to Charlotte, where big downtown projects like the Time-Warner Cable Arena haven’t helped the city’s poor. “I’ve learned by example that when we build [stadiums and arenas], people of color do not benefit at all.”
Her concerns aren’t universally shared. DHIC president Gregg Warren, a member of the Downtown Plan Advisory Committee, says he thinks the impacts on impoverished east Raleigh residents would be minimal. There’s a difference between “having an impact” and “displacement,” he says. Heritage Park, he points out, is “two streets and a major intersection away” from the proposed site.
But there would be, at minimum, increased noise and congestion. In addition, if the stadium succeeds in making the properties around it more valuable, that may lead to an acceleration of gentrification.
“I support the growth of downtown, but I do not support the growth of downtown at the detriment or exclusion of people of color,” Rainey says.
Perhaps most important, there’s also the cold reality that every dollar the state, Raleigh or Wake County pours into a new stadium is a dollar that’s not being spent elsewhere. What other public projects could the city employ to bring more life to downtown?
“In Raleigh’s case, I’d say approximately every one,” Matheson says, citing tax cuts, improved services and building better roads and new parks, for starters. “There’s tons of things that you can do that could bring greater public benefit than build a second arena in a town that already has a perfectly good arena.”
*Due to an editing error, this story originally identified Bill King as the downtown plan’s primary author. In fact, he worked on the plan as part of a team.
This article appeared in print with the headline “Edifice complex”
