Will a NWSL stadium benefit Denver businesses? Experts debate if city’s $70 million investment plan will pay off

During a new Denver City Council meeting Ryan Fleming and fellow business advocates stepped up to the microphone They urged city leaders to spend million to help bring a new women s professional soccer stadium to a dormant swath of Baker arguing it would infuse the broader neighborhood with new life and customers I couldn t understand any logic why you wouldn t want to do it noted Fleming an investor in a sports bar on South Broadway adding that the ensuing tax revenue must be reason enough to approve the project But the true economic benefits aren t so clear Decades of research show that when cities shell out millions of dollars to build stadiums they rarely recoup their costs and the local economies see limited development That s according to an analysis of more than studies of local governing body stadium deals published in in the Journal of Economic Surveys Generally research shows the facilities only move spending within different parts of a city rather than bringing in new dollars These are money pits revealed Geoffrey Propheter a professor at the University of Colorado Denver who researches the economics of sports facilities The vast majority of the burden ends up being on taxpayers Still a large number of supporters in the district and Denver Mayor Mike Johnston the city venture plan s chief proponent see the stadium project planned for the new National Women s Soccer League company as a sign of hope for a blighted lot that has sat vacant collecting trash and dirt for over a decade The stadium would be built on the northwest portion of the -acre former Gates Rubber factory site It s tucked between the South Platte River I- and the Broadway light rail station located near a section of South Broadway that is underdeveloped Store fronts sit empty and pedestrians rarely venture that far down the street from Broadway s livelier blocks to the north The proposed deal with the new organization s ownership group calls for the city to spend tens of millions of dollars for the purchase of the property and for site and access improvements while the squad s ownership group will be responsible for building the stadium itself Johnston who communicated the proposal alongside the association s owner in April has called the project a transformational opportunity It s been sitting empty and the neighbors have been waiting for this to be really activated as an economic opportunity he declared in a new meeting with Denver Post journalists Council members chosen of whom are skeptical of the city s plan and others supportive will have to weigh that area s hopes for revitalization with the uncertainty of how much the project would financially benefit the whole city The council is set to take its first full vote on Johnston s assets proposal Monday with a final decision following on May The mayor s administration which designed the proposal with the group s ownership has produced its own economic evaluation It projects billion in economic impact for the city over the next years from the stadium and neighboring mixed-use improvement That impact was calculated through a complicated economic modeling process that considers direct and indirect spending from construction as well as tax revenue and consumer purchases It s complex to quantify how much of that is projected to be from the spending of new dollars rather than just a reallocation of spending that would have occurred anyway in other areas of the city If the council doesn t agree to pitch in the million the band is unlikely to stay in Denver the ownership group s leader Rob Cohen narrated the council last month Show us that we matter too Under the proposal the city would spend up to million for the land and another million for improvements to the surrounding area The band which hasn t been named yet would build a -seat stadium there at a cost of million to million It also plans to bring in partners to build a neighboring mixed-use growth with housing and restaurants Beyond the murkiness of the economic benefits is the prospect of building one of the first stadiums dedicated to women s sports in the world For a multitude of that s the majority pivotal consideration Show us women and girls of Denver that we deserve the opportunity and facilities that the men do Sydnee Mitchell communicated the council during that same meeting in April Show us that we matter too The city s economic analysis also emphasizes that factor The long-term public benefits such as population pride local identity opportunity for women in sports and youth engagement have the prospective to make this project not just about dollars but civic identity opportunity and inspiring the next generation according to the analysis The city record also says the project would create jobs with a substantial portion of that coming from indirect and induced jobs defined as additional jobs created as direct and indirect workers spend their earnings in the group A pedestrian bridge crosses over the railroad tracks near I- and RTD s Broadway light rail station at the Santa Fe Yards site in Denver on Friday April Photo by Hyoung Chang The Denver Post The review s authors made their calculations assuming that the neighboring maturation would bring in million in construction spending on a hotel restaurants and housing units They also assumed that only of attendees would be people from outside metro Denver Outside studies from a broad set of economists and journals have determined that the economic benefits of stadiums are often overstated in analyses like these One reason the city-produced research has limited usefulness Propheter disclosed is because its analysts don t consider other attainable uses of the dollars An economic impact survey only tells you one piece of information the benefits he declared It does not tell you what are the benefits of competing uses of funds and what are the costs of all manageable uses City hasn t done full cost-benefit analysis While the city s review took a limited look at the opportunity costs the trade-offs of not pursuing alternative options the in-house economist doesn t yet have enough information to perform a full cost-benefit analysis that considers all realizable uses of the million mentioned Laura Swartz the spokesperson for the city s Department of Finance The project may offer limited benefits to restaurants and bars in the immediate area but it s unlikely to have much impact on the overall economic activity of the city Propheter noted Why is moving money from one part of the city to another part of the city a good use of taxpayer dollars he disclosed Because of a tax-break measure already approved for the former Gates site the city also wouldn t have a chance to collect property or sales tax there until The group plans to ask for permission to obtain additional tax breaks to help recoup the cost of the stadium stated Dan Barrett an advisor to the ownership group during an April meeting between the council and the mayor Johnston stated the city would have to approve such a request including deciding whether it has a community purpose Under a plan laid out by the Department of Finance Denver largely would spend interest money that s accrued in its Elevate Denver bond plan for its contribution That money would be used indirectly with the city putting it toward other city projects that are being paid for through its capital projects fund that saved money would then be used for the stadium Related Articles Harsh sentencing in Colorado municipal courts is unfair and deeply troubling Letters Is the NWSL stadium a good resources for Denver Editorial Denver soccer stadium deal moves to full council after owners mayor s office appear to assuage concerns Denver s venture in the new soccer stadium will help South Broadway Letters Denver NWSL names Cherry Creek CU alum Jen Millet as president and squad s first employee Councilwoman Sarah Parady has announced she s worried that given the uncertainty of the worldwide financial sector the project will never come to fruition That s what happened in Commerce City with maturation around Dick s Sporting Goods Park Opened in the stadium was originally meant to be the centerpiece of a -square-foot growth to include housing shops restaurants and offices Voters there approved a million bond to help finance it The owners never built out the project though These are altogether different projects reported Cohen the Denver NWSL gang owner pointing instead to the revitalization of Lower Downtown that occurred in the s when the Colorado Rockies ballpark opened I think it is more comparable to Coors Field than it is to the stadium in Commerce City If the council approves the agreement for the NWSL stadium the club will begin soliciting constituents input and designing the site The council would have a chance to consider the detailed plan in the fall and if the project moves forward construction would unfold with the goal of a opening for the stadium Stay 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