Sport facility planning involving government

 

Sport teams have an economic impact through activities that promote employment in areas such as front offices and day of game employees in part time temporary positions. The presence of a sporting stadium also has an economic impact on the restaurants in the vicinity, ticket payment for entry into the stadiums from people within the area as well as others from different states. Economists consider the economic gain that building new stadiums promote. They indicate that some of the gains are made from opportunities provided through seats, catering facilities, advertising and other luxury facilities (Siegfield & Zimbalist, 2000).

Professional sporting groups in the US have been sharing stadiums such as the Lakers in Los Angeles and Kings playing in Staples Arena. The government has been contributing a certain percentage of the construction expenditure for the stadiums (Siegfield & Zimbalist, 2000). The Convention Sport Leisure presented a report on the economic impact of the Major League Ball Park to the Redevelopment Agency of San Jose California in September 2009 (San Jose Redevelopment, 2009).

The economic impact of the Major League Ball Park depends upon the amount and nature of spending that takes place in the San Jose city (San Jose Redevelopment, 2009). It is estimated that twenty five percent of the labor and twenty percent of the materials used in the construction of the stadium shall have a direct impact on the city’s economy. During the three years of construction the project is estimated to create 350 jobs and a projection of 980 jobs in the recurring years up to 2018  (San Jose Redevelopment, 2009).

The estimated personal income from the project for the recurring years after construction of the project is projected period of 2018 is at $61,940,000 while ones for the next 30 and 50 years is projected at $1,371,500,000 and $1,968,400,000 respectively (San Jose Redevelopment, 2009). The Ballpark is also estimated to host three non-Major League Ballpark (MLB) events and other large scale outdoor events every year. This will have a positive contribution to the San Hose market because the city does not have a facility that is big enough and capable of accommodating outdoor activities (San Jose Redevelopment, 2009).

The positive economic impact for the supply chain will be accounted for by the fact that half of the attendees of the games in the Ballpark are estimated to be non-San Hose residents. Additionally, the spending inside the facility from MLB and non-MLB events is also estimated to be at $49 and $74 per person. Spending outside the facility is estimated at $47 and $26 for MLB and non-MLB events respectively (San Jose Redevelopment, 2009).

In ensuring transparency in tracking the economic impact of the project, it is important that the audit accesses accurate information about the origin of the attendees of the park and those that are drawn to the city owing to the presence of the facility in the city. The economic impact of a proposed sporting facility mainly depends on the context of the facility. This means that if a facility A is built in the city of Glendale and attracts residents of the City of Phoenix, it means that the construction of facility A is making a positive impact to the economy of the city of Glendale. However, if only residents of Glendale visit facility A, this may not be interpreted as a positive economic impact because the residents only change the location where they spend their entertainment budget within the same city making no extra contribution of the city’s economy (Connolly, 2012).

It is important to have a reporting system in place to provide accurate information on the new transactions that are triggered by the facility in the city. The system is an important way of collecting information on the main drivers of the positive economic impact (Garofalo & Waldron, 2012). It is also important for establishing marketing strategies to ensure that the facility is occupied for most of the time during the year. The system must also monitor the number of non-San Jose residents that visit the city and the type of activities that they undertake to get a true report of the economic impact of the facility.

References

Connolly, B. (2012, October 1). What Does Economic Impact Really Mean. Retrieved October 29, 2013, from The Business of Sports: http://www.thebusinessofsports.com/2012/10/01/what-does-economic-impact-really-mean/

Garofalo, P., & Waldron, T. (2012, September 7). If You Build It, They Might Not Come: The Risky Economics of Sports Stadiums. Retrieved October 29, 2013, from The Atlantic: http://www.theatlantic.com/business/archive/2012/09/if-you-build-it-they-might-not-come-the-risky-economics-of-sports-stadiums/260900/

San Jose Redevelopment. (2009, September 2). Economic Impact Analysis: The Proposed Major League Ball Park. Retrieved October 29, 2013, from San Jose Redevelopment: http://www.sjredevelopment.org/ballpark/ei_report_09022009.pdf

Siegfield, J., & Zimbalist, A. (2000). The Economics of Sports Facilities and Their Comminities. Journal of Economic Perspectives, 14(3), 95-114.

 

 

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