Millions of dollars are spent each year by sports-loving Americans. From local sports to college sports to professional sports, fans are enticed to attend sporting events in part because of sports facilities and their amenities. In spite of a weak economy, new stadium projects are expected to cost upwards of $1 billion this year.
The multi-million-dollar facilities are springing up across the country. With the big price tag construction or major renovation at these facilities cost, more local governments, colleges and universities and sports team owners are looking to private partners to help provide an additional source of revenue. Thus, public-private partnerships are offering an attractive alternative source of funding.
Here are some current examples:
- The Potomac Nationals, a Class A affiliate of the Major League Washington Nationals, are planning to build a $25 million new stadium. A $70 million public-private partnership has been announced and work will begin soon on a new stadium. The facility, which will connect to a shopping center called Stonebridge at Potomac Town Center, will serve as an anchor for retail development and transportation. The Virginia Department of Transportation has committed $15 million, Roadside Development, the manager of Stonebridge, will invest $30 million and the Potomac Nationals will contribute $25 million to the project. A $15 million commuter parking garage, financed by the Virginia Department of Transportation, and $30 million in site and infrastructure work, paid by a D.C. real estate firm, are also part of the plan.
- A smaller project has been launched by Simmons College in Massachusetts. The college plans to renovate a run-down, state-owned sports field through a public-private partnership. Simmons, hoping to improve the community’s access to recreational space, will share the new multi-use athletic field with the surrounding community, middle schools and high schools and local Little League teams. The project, estimated to cost $5 million, will include renovations, the creation of new fields, a running track, tennis courts, river path, lighting and amenities for athletes and spectators.
- Minnesota Vikings players and fans will be able to enjoy a new stadium in 2016 because of a public-private partnership that was established to fund the $975 million downtown Minneapolis stadium. This initiative had the support of Gov. Mark Dayton, who wants to keep the Vikings in Minnesota for the next three decades.
- The University of Hawaii at Manoa is getting a new $13 million athletic facility. Through a public-private partnership, the university will be able to build grandstand seating, offices and locker rooms for women’s soccer, cross country, track and field and sand volleyball teams. The project is scheduled to be completed by 2013.
- The San Francisco 49ers have announced a decision to leave Candlestick Park, their home since 1960, to play in a newly constructed stadium scheduled to open in 2014. The new stadium will carry a cost of $1.2 billion and will be the result of a public-private partnership.
Public-private partnerships (P3s) are becoming a common practice and the preferred way to fund sports-related building projects. The P3s stimulate local economies, create jobs and please sports fans, but it is incumbent on both taxpayers and public officials to monitor these efforts in a prudent way.