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Ballparks as Urban Anchors Livingston Case Studies in Urban Development

Ballparks as Urban Anchors

Livingston Case Studies in Urban Development

Penn Institute for Urban Research University of , PA

Eugénie L. Birch, Cara Griffin, Chau Lam

Contents

Introduction ...... 1

Case 1. : ...... 3

Case 2. : ...... 11

Case 3. Nationals: ...... 17

References ...... 23

Introduction

Baseball parks not only provide presented here originated with materials centers for sports and other civic and discussions at PRAI 2011 and reflect activities, but also have the capacity to the challenges the institutions were build wealth for their local economies. In contending with at that time. this regard, they act as “urban anchors” – geographically rooted entities that offer the jobs, services, entertainment options, Ballparks social centers, and other necessities and amenities that make urban life attractive. Ballparks as Urban Anchors Penn IUR has produced this compilation examines how ballparks can anchor of case studies on ballparks as part of our urban revitalization, focusing on broader effort to build scholarship on the ballparks as entertainment centers, role of urban anchors. Together, these sources of community pride, and case studies illuminate many of the issues redevelopment catalysts. Penn IUR has with which baseball teams grapple in gathered here case studies of three such engaging with their cities. facilities. We believe that sharing the These cases are intended to be challenges and debates that these used as a teaching tool to explore the institutions have tackled will help relationships between ballparks and the students of public policy at all levels cities in which they are located. They ask understand the kinds of hurdles – both readers to explore questions such as: In internal and external – that baseball what ways do ballparks contribute to teams face in engaging with their cities. their neighborhoods, cities, and regions? Our hope is that this improved How do these benefits balance the use of understanding will facilitate coordination public monies in building these facilities? among all parties involved in creating How can new or renovated ballparks mutually beneficial relationships. catalyze development beyond the Penn IUR is a leader in research building site? How can teams engage the into anchor institutions. Penn IUR Co- local community to help transform urban Directors Eugenie Birch and Susan areas in ways that benefit both the team Wachter are among the co-founders of the and the community? These materials are National Anchor Institution Task Force, meant to spark conversation and an organization that develops and discussion among students of policy at all disseminates knowledge that helps create levels in urban studies, arts mutually beneficial anchor administration, and other related fields. institution/community partnerships. The Cleveland Indians: Through the Penn IUR Roundtable on Progressive Field case discusses the Anchor Institutions (PRAI), Penn IUR has hurdles the Indians’ leadership faced in convened numerous anchor institution engaging the public sector to envision, leaders, their civic collaborators, and design, and identify funding for ballpark technical experts for intense, day-long renovations. roundtable discussions. The case studies

The Philadelphia Phillies: Nationals cases. Penn IUR’s Chau Lam Citizens Bank Park case examines the researched and wrote the Philadelphia decision-making process that resulted in Phillies case. the Phillies 2004 move to Citizens Bank Park. The : Nationals Park case explores the relationship between a relatively young ball team and a neighborhood in transition and asks what a mutually beneficial co-evolution might look like.

Acknowledgements This research would not have been possible without the generous financial support of Lawrence Nussdorf and John Livingston. Lawrence Nussdorf’s contributions made possible Penn IUR’s Roundtable on Anchor Institutions (PRAI), which convenes leaders of anchor institutions to discuss common issues, including (among others) leaders of the Cleveland Indians, Washington Nationals, and Philadelphia Phillies in 2011. John Livingston supported the research and development of these case studies.

Contributors Penn IUR Co-Director Eugenie L. Birch spearheads Penn IUR’s anchor institution research; she convened and moderated PRAI discussions, and, and directed research and writing of these case studies. Cara Griffin, Penn IUR Editor and Publications Manager, coordinated the development of these case studies and researched and wrote the Cleveland Indians and Washington

2 Livingston Case Studies in Urban Development Case 1. Cleveland Indians: Progressive Field Cleveland,

Introduction Case Summary

Progressive Field belongs to Development Timeline the generation of downtown baseball parks built to bring fans to teams and Early efforts to Secure a New attention and investment to cities. When it opened in 1994, Progressive In the 1980s, when efforts to Field (then Jacobs Field) was a state- develop a new stadium for the of-the-art facility. But in the two Cleveland Indians began, the team decades after it opened, it grew to played at Cleveland Municipal need renovations: not only Stadium, located on the shore of Lake predictable maintenance work, but Erie. This facility had been built in also improvements to update ballpark 1932 to house both the Cleveland infrastructure and align revenue- Indians baseball team as well as the generation opportunities with the ’s Cleveland Cleveland market and modern fan Browns. As such, it was one of the preferences. Over this same period, nation’s first multi-purpose facilities. the city and region in which it was The Indians began playing in built changed: the Fortune 500 Cleveland Municipal Stadium full time companies that once bought luxury in 1949. suites left, the local and regional job Cleveland Municipal Stadium base shrank, and the city and regional suffered from a number of drawbacks population from which it drew fans that were common to big, multi- grew smaller. purpose : its enormous size This case explores the hurdles made even large crowds of baseball the Cleveland Indians’ leadership fans seem small; views from many were facing when they took part in seats were poor; and the concrete PRAI 2011. It asks readers to consider construction lacked character. how to engage the public sector to Additionally, the stadium did not age envision, design, and identify funding well; by the 1980s it was in visible for ballpark renovations. disrepair, with concrete falling off the facade. Despite the fact that the facility was clearly deteriorating and needed to be replaced, voters in Cuyahoga County (for which Cleveland is the county seat) defeated in 1984 a property tax increase intended to finance the development of a new, downtown stadium that would have housed both the Indians and the complex and to lease the ballpark and Browns. After that defeat, business the arena to the teams; its board and civic leaders came together to members were appointed by the city form an alternate plan. Working and the county. Construction of the through “Cleveland Tomorrow” – a ballpark began in 1992 and was civic organization that had been complete in time for the 1994 season. formed several years earlier to Supporters sold this effort as a support the city’s “long-term downtown revitalization project that economic health” – this group floated would leverage private investment. another plan for a shared stadium, This argument was buttressed by the this time to be financed by “sin tax” on fact that, during the campaign for the alcohol and cigarettes. This plan, tax increase, however, floundered before it ever implied that it would move the team came to a vote. out of Cleveland if a new facility was not built. Though supporters The Gateway Sports and Entertainment promised that the project would Complex transform downtown, no detailed downtown revitalization plan existed Things changed in 1990 when in 1990 and no leases – or even the concept of a complex of sports Memorandums of Understanding – facilities with both public and private with the two teams were in place and financing gained sufficient political the teams had not been asked to make and popular support to move forward. specific investments to support In that year, voters approved a new downtown (Rosentraub 2009). fifteen-year sin tax on alcohol and Despite this, voters approved cigarettes to finance what would be the financing plan, though very called the Gateway Sports and narrowly: only a 51.6 percent majority Entertainment Project. This complex voted in support of the plan. The vote would include a new ballpark for the was a county vote and most support Indians (Progressive Field, originally came from the suburbs, not the city, called Jacobs Field), a new basketball although project would be built in the arena for the Cleveland Cavaliers city. (Quicken Loans Arena, originally Because public financing was called Gund Arena), as well as two approved before commitments from parking garages and a public plaza the teams were in place, the public (Gateway Plaza) that would be sector was put in a very weak position situated between the ballpark and the when it came time to negotiate the arena. Financed with a combination of leases in 1991 (a situation that would public money (from the sin tax) and eventually lead to lease re- private money (primarily from the negotiation) (Rosentraub 2009, 2011). teams’ owners), the complex would be As a result, the original leases with the owned and managed by the Gateway Cleveland Indians and the Cavaliers Economic Development Corporation. were very favorable to teams: the city This nonprofit corporation was and county were responsible for created by the City of Cleveland and facility maintenance and most Cuyahoga County to manage the construction costs, while the teams’

4 Livingston Case Studies in Urban Development responsibilities varied with ticket and county: as noted, the public sector sales (which were very good in the was made responsible for first several years after building the maintenance costs over $500,000 (the facilities, but not as good replacement of an escalator, for subsequently) (Rosentraub 2009). example, would be a public sector responsibility). But team leaders Lease Re-Negotiation expressed during PRAI 2011 their concern about the fact that a revenue In 2004, the leases were re- stream for such costs had not been negotiated with terms much more identified. Further, they believed that favorable to the city and the county neither the general public nor elected (Rosentraub 2009, 2011). According officials were aware that these costs to the terms of these leases, the teams were legally a public responsibility. were responsible for maintenance They feared that when a major capital costs under $500,000 and the public expenditure became necessary and for capital costs over $500,000. It is public money had to be found, that important to note that maintenance public officials would balk at finding a costs could not be aggregated; as an source of funding and that the illustration, if multiple seats needed to Cleveland Indians might then come be replaced, the responsibility was under pressure to cover such costs, determined per seat rather than even though these costs would exceed aggregating the costs of replacing all their responsibilities under the seats. Due to this stipulation, the existing leases. This they did not want $500,000 threshold beyond which the to do, especially since – with the re- public sector is responsible had not negotiation of the leases – they had been crossed as of PRAI 2011 (Penn already taken on more financial IUR Staff notes 2011). responsibility they than they The timing of the lease re- anticipated when buying the team negotiation had repercussions. Both (Penn IUR Staff notes 2011). the Indians and the Cavaliers were sold to new owners in the early 2000s with the original leases – i.e. those that Financing were quite favorable to the teams – in The ballpark cost place. The new team owners took approximately $193 million, which those original leases into account came from public and private sources. when determining the values of the About 73.6 percent of the cost came teams. When the previous owners from the public sector, with the sold the teams they profited remainder coming from the team. considerably and so, when it became necessary to re-negotiate the leases, the new owners were in an Design unfavorable position. As a result, the Designed by HOK Sport (now re-negotiated leases were more “”), the ballpark was built in favorable to the city and county. the quirky, downtown style that Still, the leases did lay out became popular in the 1990s after the significant responsibilities for the city

Progressive Field | Cleveland, Ohio 5 development of Baltimore's Camden Local and Regional Context Yards. The park’s field and fences are asymmetrical, it incorporates exposed steel design, and nineteen tall light City and Region towers illuminate a Cleveland is the county seat of bluegrass field. Sited to offer views of northeastern Ohio’s Cuyahoga County the Cleveland skyline, the ballpark and the principal city in the Cleveland- contained about 45,000 seats and 130 Elyria-Mentor Metropolitan Statistical luxury suites. In 2008, it was voted Area (MSA). Its location on the shores best ballpark by fans in a Sports of Lake Erie supported its growth as a Illustrated poll. In 1995, Money major industrial center in the late magazine said it offered the best value nineteenth and early twentieth for fans. The Indian’s leadership felt centuries. strongly that fans viewed Progressive It continued to prosper into the Field quite favorably, believing it to be 1950s with the success of the auto in good condition. They regularly industry, but as of PRAI 2011 the city received positive feedback from and region had been on the decline visitors (Penn IUR Staff notes 2011). since the second half of the twentieth century. This can be in part attributed to a decline in the manufacturing sector; to factors that contributed to suburbanization nationally (such as federal investment in interstate highways); and to the city’s negative image (with an increase in racial tensions, including two riots, during the 1960s and 1970s and the fact that the Cuyahoga River caught fire in the 1960s also contributing). While both

the city and county lost population, the city’s population declined much more quickly. Population in downtown Cleveland rebounded somewhat during the 1990s and early 2000s, although the city overall lost residents. Along with many other midwestern areas, greater Cleveland suffered particularly from the recession. In 2011, the U.S. Labor View of field, above, and ballpark at night, Department reported that Cleveland below. had the third-largest loss of jobs in the country over the September 2010 to September 2011 year.

6 Livingston Case Studies in Urban Development Downtown • Regional cooperation improved, Downtown Cleveland’s with the county holding more population shrank with that of the rest responsibility than the city for the of the city during much of the latter public portion of the costs of the half of the twentieth century, but grew downtown projects. over the last decade of the twentieth • Business leaders acted as major and first decade of the twenty-first players, working in ways that century (increasing by over 32 benefitted not just their own percent between 1990 and 2000). corporations, but northeast Ohio This positive trend has been generally. attributed in part to public-private redevelopment projects spearheaded Downtown Redevelopment by city, county, and business leaders As noted, downtown Cleveland during the 1990s. In addition to the had gained population since 1990 Gateway Complex, these included the even as the city and county lost Rock and Roll Hall of Fame (1995), the population. Additional development Great Lakes Science Center (1996), projects underway during PRAI 2011 and a new Browns Stadium (1999). were expected to influence The Gateway Project was one of the downtown’s future (Rosentraub first. 2011); these included a casino, a In Major League Winners: Using convention center/medical mart, the Sports and Cultural Centers as Tools for Flats East Bank mixed-use waterfront Economic Development, Mark neighborhood, and the possible Rosentraub notes that these redevelopment of the waterfront redevelopment projects were North Coast Harbor district (where scattered around the city rather than the Great Lakes Science Center, the concentrated in one area (2009). All Rock and Roll Hall of Fame, and the were heavily publicly subsidized. new Cleveland Browns Stadium While the benefits of these projects clustered). Of these, the $600 million were uncertain at first, after a decade Casino and $465 million convention Rosentraub noted benefits: center/medical mart would lie closest Private sector investment • to the ballpark and were anticipated increased after these big public- to affect the Cleveland Indians most private redevelopment projects profoundly (Penn IUR Staff notes were built. While direct causality 2011). cannot be proven – because too Plans for the convention many other factors influence center/medical mart, which was investment – he suggests these scheduled to open in Fall 2013, public investments likely created included showrooms for medical confidence in the private sector. products and services as well as • New leases with the Indians and conference facilities. The project, the Cavaliers helped create a which was primarily publicly funded better agreement from the public through a county-wide sales tax point of view for the Gateway increase, was drawing criticism Project. because of the size of the public

Progressive Field | Cleveland, Ohio 7 investment projected and the fact that that it was designed without it was the first facility of its kind and restaurants and hotels so that visitors so was untested. Supporters argued would spend money at other that it would bolster Cleveland’s downtown venues. Annual gaming already strong medical sector and revenue (Ohio casino profits are taxed bring more people into the city and at 33 percent) were projected to total downtown. over $29 million for the city, $10 Caesar’s Horseshoe Casino was million for the county, and over $22 expected to open in March 2012. Dan million for county school districts Gilbert, majority owner of the (additional tax revenue would go to Cavaliers, owned that project. Plans the state and to counties statewide). for the Casino showed how close it would lie to the Gateway Project, in Location within Cleveland and downtown context, below. the historic Higbees building, built in 1931. (In fact, the Casino bought one of the underused Gateway garages; at the time of PRAI 2011, plans for a connection from the garage to the Casino via a skywalk was pending state and federal review of the historic preservation repercussions.) The Casino’s owners and supporters argued that it would attract up to 5 million visits a year and that it would bring vitality to downtown; supporters pointed out

Rock and Roll Hall of Fame Great Lakes ScienceCenter

Browns Stadium

Medical Mart

Casino in Higbee Bldg. Gateway North Garage Quicken Loans Arena Jacobs Field

8 Livingston Case Studies in Urban Development However, considering the fact the number of other modern that the local economy was stable at ballparks. best and possibly shrinking, the However, the Cleveland Cleveland Indians were concerned Indians’ management faced many that the new downtown Casino would challenges in seeking public and take revenue away from the Indians private funding sources to finance (Penn IUR Staff notes 2011). They potential renovations: noted that it could, as well, draw • Positive Perception of Progressive revenue from the Cavaliers, but Field: Progressive Field was pointed out that owned viewed positively by fans, public both the Cavaliers and the Casino and stakeholders, and the local media. so stood to prosper regardless. The It was perceived as an asset to the Indians’ leadership wanted to find community that was in good ways for the Indians, too, to leverage condition and not in urgent need the success of the casino. They were of repair. considering whether, for example, • Role of Existing Public Sector they should argue that public tax Responsibilities: Under lease revenue from the casino be reinvested agreements re-negotiated in 2004, in downtown anchors, or whether the public sector was responsible they should promote urban design for major capital expenses while linkages to create synergy among the team was responsible for developments (Penn IUR Staff notes). expenses under $500,000. The public sector, however, had not identified a source of funding to cover these expenses, which Discussion concerned the team’s ownership. The Indians’ leadership took Complicating this situation was the part in PRAI 2011 with the belief that political reality that members of Progressive Field needed renovations. the general public and many newly The ballpark had undergone elected officials were not aware of predictable wear and tear in its the terms of the re-negotiated eighteen-year lifetime, which meant lease. The team anticipated that that major systems were soon likely to when major repairs became need repair or replacement. And, the necessary, the public would once cutting-edge ballpark needed a perceive those costs (wrongly) to physical upgrade to maintain its be the responsibility of the ball appeal and economic functionality in a club rather than of the public. changed market: the ballpark was • Developing a Case for Renovation constructed in an entirely different that Resonates with Funding economic climate than the one that Sources: Given the state of the prevailed in 2011 and so included economy at the local, state, and many more luxury suites than national level in 2011 and the necessary. In 2011, Progressive Field changes in the Cleveland market had 130 luxury suites, a quantity far since the construction of the exceeding market needs and double ballpark, creating a case for

Progressive Field | Cleveland, Ohio 9 renovation that would convince the public of the ballpark’s needs given other urgent public funding priorities was proving to be a challenge for the Indians.

Based on the above information, how do you think the Cleveland Indians should have approached engaging the public sector to a) ensure that funds would be available to cover predictable expenses for which the public is responsible? and b) partner with it on a public planning process to envision, design, and identify funding for ballpark renovations that would meet the needs of both the city and team?

10 Livingston Case Studies in Urban Development Case 2: Philadelphia Phillies: Citizens Bank Park Philadelphia, Pennsylvania

Introduction Until 2004, the Phillies were housed at , also The Philadelphia Phillies home to the , the moved in Spring 2004 to Citizens city’s NFL team. Because it was built Bank Park, the team’s seventh home in to accommodate both football and its 128-year history. The new ballpark baseball, Veterans Stadium was not an is part of The South Philadelphia ideal home for a baseball team. The Sports Complex that also houses stadium was very large, with a Philadelphia’s NFL, NBA, and NHL capacity of approximately 62,000, teams. Before deciding on that site in making a crowd of 45,000 (a sell-out South Philadelphia – just a stone’s crowd at most baseball stadiums) look throw from its former home, Veterans sparse. Despite showing signs of age Stadium, which it shared with the for some time (it opened in 1971), it Philadelphia Eagles – the owners and wasn’t until 1998 – when a railing the public debated the location of the collapsed at Veterans Stadium during new ballpark. This new ballpark an Army-Navy Game, injuring eight represents a major investment; this cadets – that negotiations for a new case asks readers to consider what stadium intensified. makes this a good investment and how to ensure that it remains one. Development Timeline Discussions for the new Philadelphia Phillies ballpark began Case Summary during Ed Rendell’s mayoral Formed in 1883 when the administration and continued through moved the disbanded the beginning of the John F. Street Worcester Ruby Legs to Philadelphia, administration. Several sites were the Philadelphia Phillies is the oldest considered, including Broad and continuous one-name, one-city Spring Garden Streets, Spring Garden franchise in all of professional sports. Street and Avenue, an area The team is valued at $609 million, next to 30th Street Station, and 13th making it the sixth most valuable team and Vine Streets in Chinatown; the in baseball (“The Business of Baseball” city decided and announced that the 2011). The team has gone to the ballpark would be located on the seven times, winning Chinatown site, but neighborhood twice (in 1980 and 2008) and has resistance ultimately stopped this made playoff appearances for the past plan. Additionally, the Phillies five years in a row. conducted a survey of their fan base, which indicated that most fans were in favor of the stadium remaining in

South Philadelphia (Penn IUR staff notes 2011). In November 2000, Mayor Street announced the abandonment of development plans for a downtown stadium and confirmed, instead, the decision to build the Phillies’ new stadium across the street from the former Veterans Stadium. The City Council approved this decision as part of a deal that also included financing for a new stadium for the Philadelphia Eagles. The fate of the two sports facilities – and of the Pirates’ PNC Park and the Steeler’s Heinz Field, both in Pittsburgh – had become intertwined when the four teams together petitioned the state legislature for funding for new facilities. State funding for the four facilities was announced in 1999 by Governor Tom Ridge. Critics argued that the Phillies ballpark deal was settled too hastily, rushed by the city’s commitment to the Eagles to reach a funding agreement by the end of 2000. If the city failed to honor this commitment, it had agreed to buy the Eagles’ $23 million practice facility and to renovate Veterans Stadium at a cost of Location within Philadelphia, above, and up to $80 million. The Eagles had view of ballpark toward downtown, below. already completed design and construction documents for their new stadium and were anxiously awaiting a final decision on the Phillies stadium Once the City Council approved so that they could proceed with the financing of both the Eagle’s construction. stadium and the Phillies ballpark, construction began; the ballpark was completed in March 2004. The season opener, in April 2004, served as the Citizens Bank Park’s inaugural game.

12 Livingston Case Studies in Urban Development

Financing parking operations, landscape Citizens Bank Park was built beautification projects, public safety for $450 million, approximately half of initiatives, and community events. A which ($221 million) was publicly minority participation requirement financed. The State of Pennsylvania was also part of the deal; this ensured contributed $85 million and the that 35 percent of contracts related to remaining $136 million was funded ballpark construction were granted to through a 2 percent rental car tax minority-owned businesses, 12 levied by the City of Philadelphia. This percent to women-owned businesses, arrangement meant that visitors to and 2 percent for disabled-owned Philadelphia would bear a greater tax businesses. burden than would city residents. The team contributed the remaining $229 Design million and agreed to pay for any construction cost overruns. Citizens Bank Park, which sits A portion of the team’s $229 on a twenty-one-acre site, was million responsibility came from a designed by Ewing Cole Cherry Brott – package of rights sold to Citizens Bank a local architectural firm – with input for $95 million over twenty-five years from HOK Sport (now “Populous”). – this included $57.5 million for The stadium, which has a capacity of naming rights and $37.5 million for a 43,647, is fitted with bowl-style Phillies broadcast media package. seating, inspired by the Phillies’ Much of the remaining funds came former homes Baker Bowl (1887- through a loan with FleetBoston 1938) and Stadium Financial Corporation. (1938-1970). Visitors enjoy views of The public-private agreement the Center City skyline, and players also included provisions for the play baseball on a field of Kentucky Phillies to contribute locally. The team blue grass. The stadium, which is agreed to contribute $1 million per surrounded by over 1,500 trees, has year for thirty years to a nonprofit received numerous accolades for fan fund for children managed by the experience, food quality, and socially 1 Philadelphia Foundation (The responsible practices. It is renowned Philadelphia Foundation 2011). for its excellent sightlines, with seats Additionally, the Phillies – as well as throughout the stadium all focused the Eagles and Comcast-Spectacor (which owned the 1 Citizens Bank Park was the and their home facility the Wells recipient of the title “Best Ballpark Fargo Center, also within the South Food” in the first annual Food Network Philadelphia Sports Complex) – Awards in 2007 was voted #1 vegetarian agreed to contribute a combined $1 friendly ballpark by PETA in 2007, 2008 million per year to fund the Sports and 2009. Finally, the Phillies was the Complex Special Services District, first MLB team to join the EPA’s Green which was established to improve the Power Partnership Program, through quality of life within nearby which it has purchased 20 million neighborhoods through traffic and kilowatt-hours of renewable energy.

Citizens Bank Park | Philadelphia, Pennsylvania 13

towards home plate. Fans enjoy great South Philadelphia Sports Complex views of the game, even in standing- The sports stadium area was room-only areas and throughout the originally developed in 1926 for the concession stands. Sesquicentennial International Exposition. Prior to the Expo, the area was a shantytown known as “the Neck” and was part of Passyunk Township, not Philadelphia. While most Expo structures were taken down, the stadium remained and was renamed Philadelphia Municipal Stadium (and later renamed JFK Stadium in 1964). The Wells Fargo Center, a multipurpose indoor arena which replaced that stadium in 1996, Aerial view of ballpark. houses the ’s Flyers, the National Basketball Association’s 76ers, the National Local and Regional Context Lacrosse League’s Wings, and the Arena Football League’s Soul. In addition to this multipurpose facility, City and Region to (home of the The population of Philadelphia NFL Eagles, opened in 2003), and to was just over 1.5 million, making it the Citizens Bank Park, plans are under sixth most populous city in the United way to open a new entertainment States and the fifth largest venue, Philly Live!, at the site of what metropolitan area in the United States used to be the Spectrum, an indoor (U.S. Census 2010). City population arena. was on the decline since the 1950s The area immediately though it has recently started to pick surrounding the Phillies’ ballpark is back up (Gammage and Duchneskie dominated by sports facilities (Shpigel 2011). 2009). The teams share parking Due to its history, tourism spaces, and jointly fund a special remains a major industry for services district in their vicinity. Philadelphia, although education and health have also emerged as principal drivers of the local economy.

14 Livingston Case Studies in Urban Development

merchandise sales, the city gains via a

I-76 Schuykill Expy 20 percent parking tax, a 10 percent per drink tax that contributes directly to the School District of Philadelphia, and a 5 percent amusement tax.

Citizens Bank Park When the teams do well, so

Subway Stop does the city. According to the City of Philadelphia’s Department of Site for Philly Live! FDR Park Commerce and the Philadelphia Sports Congress (PSC), a successful Wholesale Food Distributor postseason run could generate up to Wells Fargo Center $20 million in incremental spending Lincoln Financial Field for the local economy – over $19

I-95 Delaware Expy million in direct spending from visiting fans, media, sponsors, and MLB partners, and a corresponding Clustering of sports facilities. $2.5 million in tax revenue for the City of Philadelphia (City of Philadelphia 2008). Finally, hosting a team such as Economic Impact the Phillies could increase the income Supporters of the Sports tax base for both the city and state. Complex argue that clustering these For the 2011 season, the Phillies sports and entertainment venues payroll was approximately $168 allows the teams to build off of the million, upon which the state of others’ fanbases. They argue that Pennsylvania receives a flat income baseball fans who attend events at tax of just over 3 percent. Although Citizens Bank Park in the spring are there is no special city income tax on more likely to return to the Sports residents, there is a 2.8 percent tax Complex for football games in the fall levied on players’ salaries for games and hockey and basketball games played at home in Philadelphia, which through the winter. With the Sports also applies to players from visiting Complex’s added role as a concert and teams for the portion of salaries entertainment venue, the area draws a received when they play in diverse crowd and provides various Philadelphia. forms of entertainment at a wide array of price points. Supporters of clustering the Discussion facilities argue that year-round activity adds jobs that, together, create Before the decision to build year-round employment – as opposed Citizens Bank Park was made, several to simply seasonal employment – for downtown sites were considered over the area’s residents. They also argue the course of two mayoral that, in addition to revenue generated administration as, in the 1990s, the through ticket, concession and nationwide trend was to build ballparks downtown. Opposition from

Citizens Bank Park | Philadelphia, Pennsylvania 15

neighborhood associations, however, as well as cost considerations, ultimately resulted in the decision to build in the South Philadelphia Sports Complex. The ballpark represents an enormous investment: construction totaled over $450 million, with costs split roughly 50-50 between the public and private sectors. In what ways is this a good investment for the team and for the City of Philadelphia? What factors make it work in Philadelphia? At a time when most cities and teams build new ballparks in downtowns, why and when is clustering sports facilities in a city’s outskirts a compelling model for stadium development? How can the team ensure that this remains a good investment, for both the team and the city?

16 Livingston Case Studies in Urban Development Case 3. Washington Nationals: Nationals Park Washington, D.C.

Introduction Case Summary

Nationals Park was built in The Nationals 2008 as a result of Washington, D.C.’s successful bid for the relocating As noted, the Major League . As part of its bid for Baseball (MLB) franchise that became the team, D.C. agreed to fund a new the Washington Nationals was ballpark to accommodate the new previously the Montreal Expos. Upon franchise, renamed the Washington the team’s move to D.C. in 2005, it Nationals. played at RFK Stadium for three Nationals Park became a seasons before moving to the newly catalytic development in Southeast built Nationals Park in 2008. Located Washington, D.C. While the decision to in Southeast D.C. on the Anacostia use public funds for the stadium was River, this ballpark was part of a city contentious, the argument that the plan to revitalize its industrial stadium would help revitalize the waterfront neighborhood and the rundown industrial waterfront district riverfront (Bernstein 2005; Meyer in which it would be sited helped tip 2008). the public debate in favor of funding. Three years after it opened, it From Montreal Expos to Washington was widely accepted that the Nationals public/private partnership that MLB bought the failing brought Nationals Park to the area Montreal Expos in 2002, intending to was successful. However, at the time disband the team in order to shrink the team’s leadership took part in the number of franchises, thereby PRAI 2011, the neighborhood was still strengthening those that remained. a work in progress and, while interest This followed a 2001 vote by baseball in the team continued to grow, the owners to contract MLB teams by two owners of the Nationals wanted to see (the Twins was the other a continued increase in game likely candidate). Opposition from the attendance as well as sales of suites players association (which held that and other premium seating. the owners’ unilateral decision to disband teams breached several contract provisions) and a court injunction forcing the Twins to play out the 2002 season derailed plans for contraction and left the MLB looking for a new owner for the Expos. Until a new owner was found, the team was essentially owned by each of the other twenty-nine MLB franchises, which RFK Stadium, built in 1962, was out of left it without a personal, local date; they had no hometown investment. television outlet because the ongoing In choosing a new home, MLB negotiations with the Orioles’ owner considered many cities, each were preventing Nationals games competing for the team with claims of from being shown on Comcast; they strong demographics and promises to did not have a single local owner until finance a new baseball-only ballpark. 2006, so they lacked invested Frontrunners included Washington, leadership (Kurkjian 2006). These D.C.; a location in northern ; factors and, additionally, the lack of a Portland, ; Las Vegas, ; signed lease with the new ballpark and Monterrey, Mexico. D.C.’s large already under construction, lent a and highly educated market made it a degree of uncertainty to the team's very strong contender, but the city future. When and his had to overcome objections from family bought the team in 2006 and owner Peter signed a lease agreement for the Angelos. He argued that D.C. (as well facility soon after, many of these as northern Virginia) belonged to the issues disappeared. With dedicated same market as Baltimore and that ownership at the helm, the team was moving a new team to the region ready to move forward. New would degrade the value of his ownership made three commitments: franchise. When MLB ultimately to build and field a competitive team; selected Washington, D.C. as the to offer a first-class ballpark team’s new home, it agreed to give the experience; and to be an active Mid-Atlantic Sports Network, owned participant in the community around by the Orioles, broadcast rights to it (Penn IUR Staff notes 2011). Nationals games. A critical factor in the choice to Public Financing of Stadium move the Expos to Washington was the city’s commitment to build a new The move to D.C. was ballpark that would be substantially contingent on a partnership between financed with public funding. public and private interests and Essentially, the city would create a required the building of a new public-private partnership with the ballpark, an agreement strongly city investing in the stadium and supported by Mayor Anthony private ownership investing in the Williams. Williams and others argued purchase of the team. that the new facility would help reinvigorate its neighborhood and the waterfront and generate tens of From 2005-2008: In the City, but Not millions of new tax dollars. The City Yet in the New Ballpark Council narrowly supported a public Nationals Park was not financing plan. Detractors noted that completed until the beginning of the the new stadium for the NFL’s 2008 season. So, during the team’s Redskins and a new arena to house first three years in D,C., it had several the NBA Wizards and NHL Capitals disadvantages: their temporary home, had recently been built with primarily

18 Livingston Case Studies in Urban Development team-funded sources, rather than budget, a minor miracle in the current from public investment. Others argued economic and political climates. The that public investment constituted economic viability of the financing corporate welfare; that the city should package has far surpassed even the invest in its schools and infrastructure most conservative estimates. instead; and that the city could not Nationals Park has generated more afford the financing plan. Proponents than $60 million for the District’s noted that the investment would come general revenue fund; the city enjoys a from the city, but that fans would AAA bond rating, secure financial come from all over the region, streams and high confidence from consequently driving revenues into Wall Street; more than two million the District. (Dao 2004; Whoriskey metro riders surface at the expanded 2004) local metro station – riders who Ultimately, the City Council would have had no reason to enter the voted in favor of a financing plan for area beforehand; the dreaded the ballpark in December 2004 automobile traffic never materialized; (Seelye 2004). The approval followed as many as eleven new restaurants several Council votes on elements of will be opened in the area by the end the plan that flip-flopped between of 2012; and the team employs over approval and rejection, but ultimately 1000 employees, more than half of an agreement was worked out. whom live in the neighborhood (Penn The ballpark was paid for IUR Staff notes 2011). primarily with bonds. Public financing Though slowed by economic totaled $611 million for hard and soft conditions, development around the costs for the ballpark itself ($693 ballpark continues. New office and million including land and residential buildings surround the environmental cleanup at the site, area, and have been followed by according to ). modern grocery stores like Whole In addition to the $450 million paid Foods and Harris Teeter. The for the franchise, the team ownership development of public outdoor areas contributed about $60 million for like the Canal Yard, the Winter Ice additional upgrades and parking lots Park, Diamond Teague Park and Pier, and pay annual rent of about $5 Yards Park and the mile-long million. The facility is owned by the Riverwalk are underway and promise city and leased to the team. new inhabitants as well as visitors choices for their families and From 2008 and Beyond: Nationals Park businesses. as a Center for Culture and Commerce Since the opening of the Design ballpark in 2008, the investment is Nationals Park was designed widely recognized as a successful by HOK Sports and Devrouax-Purnell model of public-private partnership Architects to reflect the city’s and offers bragging rights to past and architecture, using steel, glass, and present leadership (Meyer 2008). The concrete inspired by the national stadium was opened on-time and on- monuments. In this respect it differs

Nationals Park | Washington, D.C. 19 from other recently built ballparks, wealth of universities as well as to its which recall the quirky brick relative economic resilience during structures of the early twentieth the recession. It is a center for both century. The park’s 41,546 seats offer internal migration, especially among views of the Capitol. It incorporates college graduates, and international cutting-edge video and audio features. migration (with 21.8% of the It is the first major league ballpark to population foreign born in 2010). receive LEED Silver certification, which can be attributed to its technologically advanced and environmentally friendly innovations, its proximity to public transit, and its siting on a remediated brownfield.

! ! ! ! Navy Yard Metro Station

Navy Yard Local and Regional Context Nationals Park

City and Region Washington, D.C.’s population in 2010 was, according to the U.S. Location with Washington, D.C., above, and Census Bureau, 601,723 people, up ! from 572,059 in 2000. In 2010, neighborhood context, below. slightly more than half of D.C. residents were African American (the next largest groups were whites, at Ballpark Area 38.5%, and Latinos, at 9.1%,). The The ballpark is situated in Washington Metropolitan Area’s Southeast D.C. along the Anacostia population is about 5.6 million people River and south of downtown. The (it was the 7th largest metropolitan area is sometimes referred to as the region in country in 2010). In a 2008 Capital Riverfront District, although report, the Brookings Institution most commonly called the ballpark deemed it the highest-educated MSA area. The site, 1500 South Capitol in country (DeRenzis 2008). Street, is bounded by South Capitol The greater metropolitan area Street to the west, N Street to the has become a magnet for young north, First Street to the east and adults, a trend some attribute to its Potomac Avenue to the south.

20 Livingston Case Studies in Urban Development History Historically, the area was anchored by the Navy Yard and was a center of shipbuilding and commerce from the nineteenth century through the mid-twentieth century. After WWII, the navy reduced the size of the base, resulting in fewer jobs and less activity in the area. An elevated section of freeway, built in the late 1960s, cut between Capital Hill and the river. By the late 1990s, the Times would describe the area as “an urban wasteland of trash-strewn lots, sex clubs, and taxi and auto repair shops” (Meyer 2008).

Revitalization

Importantly, city policy became Aerial showing ballpark in center left, above. more focused on its riverfronts under View from ballpark toward Anacostia River, Mayor Williams, which are under- below. developed in comparison to other waterfront cities. The Anacostia Waterfront Initiative – a city Access framework plan that promotes and One of the outstanding things guides access to and cleanup of the about Nationals Park and its river – was adopted as city policy in relationship to its city and 2003 (D.C. Office of Planning 2003). neighborhood is its reliance on public Over the past decade, the area has transportation. Fifty-three percent of seen significant public and private fans visit the park via public investment (Nationals Park being a transportation, mainly by Metrorail leading example). The ballpark is (Navy Yard Metrorail Station) (Penn widely considered a catalytic IUR Staff notes 2011). Smaller development in the area. A numbers take the bus, water taxis, restructuring of naval bases in 1998 bike, or walk. With increased was another factor in the area’s residential growth in the immediately resurgence, as it moved surrounding area, more and more fans approximately 7,000 jobs from are expected to arrive on foot. Arlington, VA to the Navy Yard.

Nationals Park | Washington, D.C. 21 Discussion that could further these goals? What The public, generally, perceives arguments can the team make that Nationals Park to have contributed to these are in the public interest? Will its neighborhood’s transformation – increasing attendance on game days, although that transformation is not for example, increase vibrancy in the yet complete. And only five years have neighborhood? How? passed since the Nationals landed in the nation’s capital: not much time to build a fan base but enough time to start seeding the market. Three years after the ballpark’s opening, a publicly sponsored riverfront walkway and park along the waterfront just outside the ballpark’s doors is underway but is not yet completed. In the private arena, many office and residential development projects have opened for business, but some lots adjoining the ballpark have stalled while awaiting financing. One of the challenges the National’s leadership faces is that the nation’s capital houses many newcomers and short-term residents who already hold allegiance to their hometown teams. Conversely, some of these newcomers arrive from cities that don’t have their own major league team and are ready to be engaged by the D.C. franchise. Both the neighborhood and the Nationals are evolving: the neighborhood is revitalizing and the Nationals are building a fan base. In these conditions, several questions have emerged: How can each evolve in mutually beneficial ways? What common interests are shared by the public and by the team, both of which are invested in the ballpark, neighborhood, and city? What could happen in the changing neighborhood that would help increase attendance and sales of premium seating? Are there public policies or investments

22 Livingston Case Studies in Urban Development

References

Bernstein, Fred A. 2005. “Revitalizing the Banks Of Washington's 'Forgotten River.'” New York Times, March 27. City of Philadelphia. 2008. “City Crowned World Series Champions: Team City and Fans Celebrate Title and Economic Boost.” City of Philadelphia press release. October 21. Dao, James. 2004. “Washington Passes Crucial Council Test.” The New York Times, December 1. DeRenzis, Brooke. 2008. “Population Dynamics in the District of Columbia since 2000.” Washington, D.C.: Brookings Institution. District of Columbia Office of Planning. 2003. Anacostia Waterfront Initiative Framework Plan. Forbes. 2011. “The Business of Baseball Lists.” Gammage, Jeff and John Duchneskie. 2011. “Census: Among peer cities, Philadelphia's growth is above average.” Philadelphia Inquirer, March 25. Kurkjian 2005. “Nationals need an owner now.” ESPN The Magazine, November 16. Meyer, Eugene. 2008. “New Ballpark in Washington Anchors an Area’s Revival.” New York Times, April 16. Penn Institute for Urban Research (Penn IUR) Staff. 2011. Notes on proceedings on rhw Penn IUR Roundtable on Anchor Institutions, held December 1-2. Penn Institute for Urban Research. University of Pennsylvania. Rosentraub, Mark S. 2009. Major League Winners: Using Sports and Cultural Centers as Tools for Economic Development. New York: CRC Press. Rosentraub, Mark S. 2011. Telephone interview with Penn IUR Staff. September. Seelye, Katherine Q. 2004. “Baseball Deal Back as Washington Council Blinks.” New York Times, December 22. Shpigel, Benjamin. 2009. “In Gritty South Philly, A Piece of Sacred Ground.” New York Times, November 1. The Philadelphia Foundation. 2011. https://www.philafound.org/. Accessed September. United States Census Bureau. 2010 Census. http://www.census.gov/2010census/data/. Accessed September 2011. Whoriskey, Peter. 2004. “Md., Va. Fans Could Make Stadium a Tax Winner.” Washington Post, October 3.