SBJ/January 16-22, 2012/In Depth

Building some momentum

SportsBusiness Journal review finds roughly $9 billion in construction deals in play over the next five years, giving hope that improvements will continue

The next 36 months hold promise for sports facility construction.

Staff writer Don Muret talks about what to expect on the facilities landscape in the next few years.
Four years removed from the height of the recession, more than 40 major league teams and NCAA Division I colleges are developing new arenas and stadiums or upgrading existing buildings.

A partial list of projects compiled by SportsBusiness Journal (see listing) reveals roughly $9 billion in construction deals on the table over the next five years. Some projects are financed and moving forward, and will be finished in the next one to three years; others have longer to go before they are ready to break ground.

In the college space alone, where private money finances most projects, $2.6 billion in construction is in the works, anchored by a combined $571 million in renovations to the University of California’s Memorial Stadium and the University of Washington’s Husky Stadium.

A worker installs seats in the new Marlins Ballpark in Miami.
Photo by: Getty Images
The shaky economy remains a stumbling block for a handful of major league teams trying to get building deals done in California and Florida, but in other markets, teams have secured funding or are working with public partners to bridge the gap in financing for new construction.

And architects are trying to push along additional work by encouraging teams and facilities to embark on master plans to identify renovations and other changes that could improve the fan experience and generate new revenue streams.

As the downturn begins to subside, the outlook for building new arenas is brighter in Edmonton and Sacramento. In Minnesota, the Vikings and public officials are getting closer to striking a deal to construct an NFL stadium and keep the team in the Twin Cities.

Most important, the sports industry in general has regained the confidence of the financial markets to move ahead with projects. For example, three banks have committed $850 million in loans to help the San Francisco 49ers pay for their stadium deal.

Slow climb

It’s been a long haul to get to this point, and with public funding still scarce for projects, it’s been a slow turnaround. Big picture, 2012 will be “flat” for new openings in sports, about the same as 2011, according to Dale Koger, vice president and general manager of Turner Construction’s sports group.

That is not a bad sign considering last year’s drop of 10 percent in the volume of new construction for nonresidential buildings such as retail, industrial and office space, and sports facilities. It’s a marked improvement over the 25
percent plunge in 2010 for nonresidential construction and the 17 percent decrease in 2009, according to Turner’s historical data.

It will take three years before the general construction industry returns to pre-recession levels, when increases for nonresidential development spiked as high as 10.6 percent from 2004 to 2008, Koger said. Increases over the next two years will range from 2.5 to 3 percent, he said.

In sports, the New York Yankees, Dallas Cowboys, New York Jets-Giants and New York Mets opened billion-dollar facilities over the past three years, skewing the numbers upward for new construction. Three more billion-dollar NFL stadiums could be built over the next five years — for the 49ers, Vikings and in Los Angeles.

“What was $4 billion to $4.5 billion in construction costs in a good year is now down to $3 billion to $3.5 billion,” Koger said. “Those few $1 billion stadiums push the numbers up by 50 percent. It’s down right now, but there aresome major deals about ready to pop.”

Still, building new facilities remains spotty as the major leagues inch toward full build-out. The new Miami Marlins ballpark, BBVA Compass Stadium (the new home of the Houston Dynamo), and Barclays Center (the New Jersey Nets’ new arena) are this year’s three big league openings.

The list gets shorter in 2013, with the San Jose Earthquakes’ MLS stadium expected to open its doors, as well as the Chicago Cubs’ new $85 million spring training facility in Arizona, part of the Wrigleyville West entertainment district.

A new home for the San Francisco 49ers could be finished as early as 2014 in Santa Clara. Team officials have sold $200 million in suites.
Photo by: Populous
Two years from now, some projects could be far enough along in development that they could open, including the 49ers’ proposed $1 billion facility in Santa Clara. Last week, team officials announced their seat license program and club seat prices after generating $200 million in suite sales.

“We’re cranking on the 49ers, accelerating our work to get to a 2014 opening,” said Tim Cahill, vice president and national director of design for HNTB, the stadium’s architect.

Last year at this time, sports architects pointed to labor unrest in the NFL and NBA and the threat of canceling the football and basketball seasons as a primary reason why teams put their projects on hold.

Those obstacles are gone after both leagues signed labor deals, taking the pressure off teams to reinvest operating revenue into future development. Plus, the NFL revived its dormant stadium loan program, breathing new life into projects for clubs such as the Vikings and the 49ers.

Still to be seen is what new projects could develop from master plans under way at existing sports facilities. For example, the Carolina Panthers and Populous will spend this offseason developing ideas to refresh a stadium constructed during the sports facility building boom of the 1990s. At Bank of America Stadium and other venues of a similar age, mobile technology is top of mind for many teams needing to rewire their facilities to keep up with fans’ use of portable devices.

In some cases, NFL teams are asking designers what they can do to develop a new VIP experience in stadium parking lots with food and merchandise, said Dan Meis, a senior principal with Populous, a firm that is also working with the Buffalo Bills and Atlanta Falcons on facility development.

“It’s less about revenue and more about enhancing the experience where there hasn’t been a lot of creative thought,” Meis said. “Nobody’s trying to spend $100 million to turn their stadium into something else.”

More work on campus

Aside from construction of new arenas and stadiums, the market for renovations is busier than ever, especially in the college ranks.

Baylor, Houston and Tulane universities are targeting new stadiums and Arizona State and Colorado State are exploring the possibility of building new stadiums on campus over the next few years.

Schools are leaning on donors and tapping into a huge pile of guaranteed money from new conference television deals to fund projects, said 360 Architecture’s Nate Appleman, the designer of a $60 million renovation of Mississippi State’s football stadium.

The flurry of conference realignment is a driving force for many upgrades. Texas A&M and Missouri have plans to expand their stadiums as those two schools move to the Southeastern Conference.

Texas Christian University also is expanding its football stadium. The Horned Frogs move from the Big East to the Big 12, the school’s sixth league in 10 years. Houston, moving up to the Big East from Conference USA, wants to
Photo by: HKS
The college market continues to provide opportunities, both large and small. The top rendering shows a new football stadium planned at Franklin & Marshall College in Pennsylvania. The bottom rendering shows plans by Ole Miss to expand Vaught-Hemingway Stadium.
Photo by: AECOM
build new to replace rustic Robertson Stadium.

Design trends that began in MLB and the NFL continue to trickle down to the college space. In Seattle, Husky Stadium’s eight “kennel” suites will be built in the east end zone, a spin on the model that started it all 10 years ago at CenturyLink Field, home of the Seahawks.

Multipurpose remains a buzzword for developing flexibility into single-purpose facilities.

Teams have become “more disciplined in their thinking in terms of what these buildings need to be,” said 360’s Brad Schrock. “They’re asking us, ‘How can we take our ballpark and turn it into a soccer stadium?’ You try to be more responsible about how you spend your money.”

To that end, one model is Jeld-Wen Field, the old minor league park transformed into a new MLS stadium for the Portland Timbers. As an urban facility, its multipurpose aspect extends to a sports rehab clinic and a public park setting on non-game days, said AECOM’s Bill Crockett.

Abroad, international development continues to provide opportunities for sports architects. HKS is pursuing business in Brazil, China and Russia, and 360 is working with a large university in Mexico to develop a new arena and stadium.

What would you renovate?

The following are results of the Turnkey Sports Poll taken in December. The survey covered more than 1,100 seniorlevel sports industry executives spanning professional and college sports.

Thinking about North American sports venues, should properties be increasing, decreasing, or leaving unchanged the following areas in their venues?

If you are renovating a sports facility and all of the following areas need updating, what percentage of your budget would you allocate to each?

Stadium technology 27%
Food & beverage experience 20%
Premium seating area(s) 18%
General seating areas 18%
Sponsor activation areas 17%


  Decrease Keep the same Increase Not sure
Number of suites 47% 42% 9% 2%
Number of club seats 43% 38% 18% 1%
Number of party suites/areas 6% 30% 63% 1%
Amount of corporate meeting space 10% 39% 47% 4%

Source: Turnkey Sports & Entertainment in conjunction with SportsBusiness Journal. Turnkey Intelligence specializes in research, measurement and lead generation for brands and properties. Visit www.turnkeyse.com.

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