Taxpayers are often asked to foot the bill for new sport stadiums. This is often justified by the assurance that the stadiums will contribute to the economic development in the area enough to compensate the taxpayers. In many cases however this may not hold true. Some studies have concluded that economic development may be the cause of the construction of sports stadiums rather than the effect. There are however, certain success stories when it comes to economic development and stadiums.

One such success story is that of Indianapolis. Going back several decades into the 21^st century Indianapolis was a notable boring place, with the only attraction being the Indy 500. Fast-forward to today and Indianapolis is home to hundreds of restaurants and shops as well as both an NBA and NFL franchise. Purdue and Butler University have made the city a destination for young professionals, making the city into one of the premier tech destinations in the country. Compared to other major Midwest cities such as Detroit and Cleveland, Indianapolis is thriving. All three of the cities have major sport teams and stadiums however, so what makes Indianapolis different? For much of the development, including the sports teams, Indianapolis utilized public-private partnerships, ensuring the funding did not come solely from the government. The city used similar public-private partnerships to increase the aesthetic and cultural appeal of the city, funding the construction of museums, water fountains, and monuments. These factors combine to make the city a very attractive destination to what Richard Florida calls the “creative class”. The creative class is a group of young professionals who are attracted to cities that are culturally attractive and progressive. Florida suggests that a cities ability to attract this class of young professionals is vital to it’s economic success. Point being that the construction of sports stadiums can spur economic development, however it needs to be done in conjunction with other projects or policies. The construction of a sports stadium by itself is not enough to make a significant positive impact on economic development.

Why aren’t stadiums enough by themselves? Most of the arguments against stadiums as a vehicle of economic development revolve around the fact that stadiums do not provide a consistent revenue stream for surrounding businesses. Stadiums dedicated solely to football are especially guilty of this, with the stadium being used for football around only 10 games a season. This is just not enough of a return on an investment that is often multiple hundreds of millions of dollars. Sports stadiums also have an increasingly shorter lifespan. For example, the Georgia Dome was only 25 years old when the Mercedes-Benz stadium replaced it. One of the reasons that these stadiums are said to encourage economic development is because they attract large events such as the Super Bowl. Stadiums need to be modern to attract the biggest of these events however, so by the time a stadium is a decade old it needs to be renovated or replaced to still be economically viable. Because of this, stadiums cannot spur economic development by themselves. However, if they are funded responsibly and created in conjunction with other cultural attractions they can play an important role in improving the appeal of cities to young professionals, thus spurring economic development.

Sources Used

Florida, Richard L. The rise of the creative class: revisted. New York, Basic Books, 2014.