SBJ/Sept. 8-14, 2014/In Depth

Construction makes a comeback

Wave of new development has the facilities business jumping

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The building boom has returned with a vengeance in sports, bolstered by a slew of renovations of major league and college facilities and a multitude of new construction projects.

It’s a far cry from five years ago when most large-scale sports developments came to a standstill during the Great Recession, forcing architects to lay off experienced designers and put others on extended furloughs to weather the downfall.

The future home of the Sacramento Kings, scheduled to open in 2016.
Photo by: AECOM
The same firms that were once in downsizing mode are now competing to hire more designers to catch up with the plethora of work available, a combination of new builds and an endless stream of upgrades to major league and college venues (see listing).

Some industry observers point to a “second-generation” building boom now sweeping the

SBJ Podcast:
Facility writer Don Muret and Executive Editor Abraham Madkour talk about trends in the sports facility industry and the current building boom.

industry following an era spanning the early 1990s through the early 2000s, an unprecedented period for newly constructed arenas and stadiums across North America. From new buildings in markets like Sacramento, to refurbs in Daytona and Charlotte, and a massive spike in college facilities, this current market is red hot.

In part, the wave of new development can be traced to a backlog of projects bottled up during the recession but flowing smoothly now that the economy righted itself and the credit industry got back on its feet (SportsBusiness Journal, Jan. 16, 2011).

In Kansas City alone, home to about a half-dozen national sports design firms, “everybody is hiring and that’s the challenge,” said Drew Berst, AECOM’s director of business development. “The Kansas City sports practice is pretty strong now.”

HNTB is the busiest it’s been in years, designing five college football stadium renovations, historically its core
strength, said Gerardo Prado, the firm’s sports group director and associate vice president. One of the projects on tap: a $225 million job at Sun Devil Stadium.

AECOM’s sweet spot is arenas and the firm is juggling seven college basketball facility projects alone, including a new arena for Ole Miss. It’s also designing the Sacramento Kings’ new arena, which is a $477 million project.

Populous and 360 Architecture are ramping up staff to design, among other high-profile projects, new stadiums in Atlanta for the Braves and Falcons, respectively. Both buildings are targeted to open in 2017, replacing stadiums built in the 1990s.

DLR Group, fresh off designing a new football stadium for the University of Houston, is finishing a study for what could be a $400 million makeover of Los Angeles Memorial Coliseum. DLR officials hope to win the USC project officially after its study is submitted to school officials.

Elsewhere, Gensler, HKS and Sink Combs Dethlefs, three architects with sports practices in Los Angeles, Dallas and Denver, respectively, are flush with sports projects across the NFL, NBA, NHL and minor leagues.

In the college space, “just like anything, when there is a recession, investors and donors are hesitant to commit money,” Prado said. “People are not spending as much money to go to games, revenues are going down, there’s unsold inventory for premium amenities.

“Everything has an impact,” he said. “I’m sure there were donors willing to support programs, it’s just a matter of timing. Sometimes, schools are not ready to release information. For all of us now, it’s good and healthy. We’ve all seen an increase in staffing back up.”

In the big leagues, there’s renewed focus on upgrading buildings that opened 15 to 20 years ago, now considered middle age and in need of a facelift. Many have “good bones” in architectural parlance to have their lives extended for many more years through smart renovations.

In other cases, it’s better to build new, designers said. For example, the 26-year-old Bradley Center, an arena some say was designed “upside down” with a majority of seats in the upper deck, in less desirable spaces, is a big reason why new Milwaukee Bucks ownership is pursuing a new facility.

“Recent press in Sacramento says there will be 10,000 seats in the lower bowl [in that arena project], and Milwaukee [with 7,800 lower-bowl seats] doesn’t have that,” said Brad Clark, a senior principal at Populous and project lead for the new arena planned in Las Vegas. “Those are the challenges.”

Many buildings that opened in the ’90s are “just really getting worn out,” said Don Dethlefs, CEO of Sink Combs Dethlefs, the firm designing a $100 million makeover of the 24-year-old Target Center in Minneapolis. “Part of it is the systems … the air conditioning is dying, all of that,” Dethlefs said.

“But people want better circulation, better lobbies, more clubs,” he said. “Another trend is really opening these buildings up [with greater transparency], especially downtown, so you can see all the activity and it’s not just a lobby with solid walls around it on four sides.”

Finding the funding

Where is all the money coming from to fund this flood of sports projects? In the NFL, the 3-year-old labor agreement extended the league’s loan program for stadium development in addition to extending the number of years teams can borrow money to pay for construction.

The Philadelphia Eagles, for example, borrowed $190 million over 25 years to fund major upgrades to Lincoln Financial Field. The NFL previously restricted the term to 15 years for borrowing money and paying debt (SportsBusiness Journal, Oct. 20, 2013).

And despite increased opposition by municipalities over teams using public money for sports construction, tax dollars remain in play as a financial resource. The Carolina Panthers and Charlotte Hornets are both using public funds to help pay for remodeling their facilities. The Panthers are doing so after privately financing the original construction of Bank of America Stadium, a building that opened in 1996.

Other teams use their own private dollars to pay for upgrades with an eye on a steady return on investment by introducing a new premium product and selling sponsorship of the space.

Colleges are using the millions of dollars they collect from lucrative television deals to help pay for new facilities and renovations, supported by fundraising efforts and revenue generated from new premium seats. The TV deals keep getting bigger and bigger.

There’s a ton of activity going on to refurbish collegiate facilities, some of which are many decades older than the pros. Next year, a record $1.3 billion will be spent on college stadiums alone, according to SportsBusiness Journal research (see chart).

And much more college development is coming down the road. In late August, AECOM and the Ohio University Department of Sport Administration released the results of a survey of 136 athletic directors across all NCAA divisions, including the Power 5 conferences. The survey showed that 84 percent of ADs would invest significantly in facility improvements over the next five years. In addition, one in five ADs is looking to invest more than $50 million on campus sports projects over that same period of time.

“The TV contracts are changing the game a little bit,” said Greg Brown, AECOM’s project designer for upgrading Illinois’ State Farm Center and Clemson’s Littlejohn Coliseum. “It’s been a windfall, now and upcoming. It’s about working with the schools to figure out the best investment.”

Similar to the pros, some college football stadium refurbs are replacing structures that aren’t that old but are yielding to upgrades in part to accommodate student needs.

That’s the case at Notre Dame. 360 Architecture is working on the $400 million Campus Crossroads stadium project, targeted to accommodate students’ educational and social activities as well as the needs of the school’s football program (SportsBusiness Journal, Feb. 3-9, 2014).

Last year, Missouri opened a new press box structure designed by 360 Architecture that includes 1,200 club seats. The old press box was built in 2000.

“For awhile, we’d say after 20 years these buildings are being renovated,” said 360’s Tom Waggoner, a designer of upgrades to Notre Dame Stadium in the mid-1990s. “The project at Notre Dame was pretty much a brand-new stadium in 1997 and what [we’re] doing now will affect some of that.”

Keeping it fresh

A portion of the second generation building boom can be traced to multiple MLB and NFL stadiums replacing the old cookie cutters in Cincinnati, Cleveland, Pittsburgh, Philadelphia and St. Louis. Twenty years ago, all five cities had only one stadium serving baseball and football teams.

Turnkey Sports Poll

The following are results of the Turnkey Sports Poll taken in August. The survey covered more than 2,000 senior-level sports industry executives spanning professional and college sports.

Which new NFL stadium will you be most eager to visit, assuming all are completed as planned?

San Francisco 49ers 70%
Atlanta Falcons 16%
Minnesota Vikings 9%
Not sure / No response 5%

How long will it take for sports venues built between 2010-15 to become outdated?

Less than 20 years 47%
20-29 years 39%
30-39 years 11%
40-49 years 1%
50 or more years 1%
Not sure / No response 1%

Which of the following do you think fans would opt for when attending games of their favorite team?

Affordable tickets in a venue with few amenities 50%
More expensive tickets in a state-of-the-art facility 45%
Not sure/No response 5%

In which of the following sports does the quality of the venue and its amenities play the biggest role in fans’ at-event experience?

MLB 41%
NBA 18%
NFL 18%
Motorsports 8%
NHL 5%
MLS 3%
Not sure / No response 7%

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.


But now, through more thoughtful design and increasingly savvy team owners, the newer single-sport venues have the flexibility to capitalize on renovations and last much longer compared with the stiff, multipurpose concrete edifices that grew stale and outdated over their 30-year lifespan.

“If you go back to the ‘donut’ buildings, they really never changed,” said Jon Knight, a senior principal at Populous. “They were built and that was it. Done. Game over. Today’s owners are more sophisticated about understanding what the requirements are of always having something fresh out there.”

Case in point: Over the past four years, Knight has worked on upgrades to Gillette Stadium, the New England Patriots’ facility that opened in 2002. The improvements include a new club in the south end zone expected to open for the 2015 season.

The Kraft family, the Patriots’ owner, recognized that seven to 10 years after the stadium opened, there would be a need to upgrade, improve, refresh and change the experience for customers, Knight said. Populous already has designed renovations to both sideline clubs.

“They realized that people’s ideas of what’s good today can change and you’ve got to be nimble enough to say we’re going to change with it,” he said. “We’ve spent a lot of time and energy helping them understand what all the implications are across the board.”

Overall, teams are putting pressure back on designers to come up with something new on the premium front to keep fans going to the games regardless of their age, said Bill Johnson, a senior principal with 360 Architecture designing the Falcons’ new stadium.

“A lot of the buildings now under renovation and being evaluated for new things are the ones that have a bunch of suites and club seats and no other options,” Johnson said.

The downsizing trend is still going strong to meet the needs of small and midsize companies by cutting large suites and club spaces into groups of loges and theater boxes designed with two to six seats supported by dining spaces.
It all started about five years ago at NBA and NHL arenas and has now crossed over to the NFL at Ford Field as the Lions reshape traditional suite inventory that has gone unsold over the past few years.

The same is true for college facilities depending on the market. In general, smaller club spaces are trending to make it easier for sports marketers to sell 500 to 1,000 seats compared with larger amounts of premium inventory, Prado said.

College projects have been a major part of the uptick. LSU just wrapped up a $78 million project that added suites and club seating in the south end zone.
Photo by: LSU
At Iowa State University, HNTB is designing two 1,500-seat clubs stacked on top of each other as part of a $30 million project to enclose the south end zone at Jack Trice Stadium. The new clubs will provide opportunities to get younger Cyclone fans introduced to premium-seat products, he said.

There’s a caveat, though: The indoor clubs won’t feature an overabundance of big-screen televisions and extended couches. Iowa State AD Jamie Pollard doesn’t want to make it too comfortable. He wants fans sitting in their outdoor seats to watch the game and make it intimidating for opponents.

“He doesn’t want people hanging out in the clubs all the time,” Prado said. “He wants a great atmosphere. What if we’re creating all these spaces like fantasy [football] lounges, driving people away from the seats? Then you have a stadium half-full when in reality it’s at full capacity. It’s embarrassing.”

Aside from the trend to go small, architects are charged with creating new general admission and standing-room spaces to attract the millennial generation that travels in packs and is more interested in socializing with friends and communicating by mobile device than watching the game.

At Coors Field, the new Rooftop deck served that demographic well this season for the Colorado Rockies. The retrofit was a big hit with the singles crowd, many sitting in cabanas with no view to the game. Its success has other MLB teams taking a close look for how to fill their own upper decks.

In Atlanta, 360 Architecture has carved out four corner concourse bars that look from the seating bowl to the field. There are no seats at those destinations, though. They’re designed to allow people to grab a drink at the bar and check fantasy stats on their mobile device.

They will still be able to see the scoreboard and the game, Johnson said. The issue in the NFL, though, is those standing-room-only areas are not tied to a specific seat, so it can be difficult to quantify the dollar value of that space as it relates to the league’s revenue-sharing formulas, he said.

It’s something to keep an eye on as teams and facilities develop these gathering spaces to capture future generations of fans.

“That’s where the push is,” Johnson said. “What we’re trying to do is break down the status quo of what’s available … contrary to the way capacity is judged or the value of a seat is judged, all of those things that are revenue drivers. The Falcons are a lot more aggressive about it than other teams.”



People putting the pieces together

DON BARNUM

Senior leader, DLR Sports Group
Barnum helped design the University of Houston’s new football stadium and now plays a key role in efforts to redevelop Los Angeles Memorial Coliseum. DLR Group is preparing a study for USC to renovate the historic stadium with an eye on winning the job officially to design the project.

GREG BROWN

Senior associate and project designer, AECOM
AECOM is designing renovations to Clemson’s football stadium and basketball arena. At Littlejohn Coliseum, Brown is exploring ways to merge the arena into the game-day experience for college football. It’s one more way for schools to capture revenue tied to their sports facilities.

STEPHEN FRANKLIN

Vice president and division manager, Brasfield & Gorrie
Franklin served as the construction firm’s project lead for LSU’s $78 million upgrades to Tiger Stadium, which includes 70 new suites and a 3,000-seat club level on the facility’s south end zone. Brasfield & Gorrie is also the general contractor behind renovations to Alabama’s Bryant-Denny Stadium.

MIKE HARVEY

Principal, Sink Combs Dethlefs
Harvey’s current work covers improvements to the upper concourse at MTS Centre, including the addition of 56 new loge boxes just below the owner’s suite. It’s part of ongoing efforts by the Winnipeg Jets to ramp up arena amenities three years after the market regained an NHL franchise.

TERRY MCINTYRE

Director of business development for sports venues, Shawmut Design and Construction
McIntyre, USA Today’s former sports marketing director, pursues construction projects for a firm that has found its niche working on small to midsize renovations at arenas and stadiums. Shawmut’s current jobs include TD Garden’s $70 million facelift and Wi-Fi upgrades at most MLB parks.

­— Compiled by Don Muret

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