BOB's a Bust

Bank One Ballpark was touted as a powerful economic engine for downtown. Data show, however, that BOB has fueled sales mostly for BOB. The meager spillover doesn't bode well for the Arizona Cardinals' stadium aspirations.

Nevertheless, Rex says there is some positive impact on the local economy from fans who attend games from outside the region and from spending by visiting teams.

The weak linkage between BOB and the surrounding community is not a surprise to sports economists. Study after study conducted since 1970 concludes that public subsidies for stadiums and teams enrich athletes and owners at the expense of taxpayers.

"Across three decades, a small group of scholars has concluded that neither the teams nor the facilities they use are a source of substantial or even meaningful economic development," wrote David Swindell of Wright State University and Mark S. Rosentraub of Indiana University in a comprehensive 1998 study on public funding of stadiums and arenas.

Captive market: BOB and its restaurants have 
captured most of the increased downtown sales.
Paolo Vescia
Captive market: BOB and its restaurants have captured most of the increased downtown sales.
Ted Ferris wants visitors to pay for the Cardinals 
stadium.
Ted Ferris wants visitors to pay for the Cardinals stadium.

"New facilities do not engender substantial job creation or economic development regardless of whether the frame of reference is a downtown area, a city, a county, or a region.

"In addition, placing facilities in downtown locations to influence overall development patterns seems to have no significant impact. Business location decisions are not made on the basis of the presence of a team. Thus, the economic spillovers resulting from a team's presence are minimal and do not provide the return necessary to justify the public's investment."

BOB's minimal impact on downtown businesses is also a reflection of the design of the stadium, which features two onsite full-service restaurants and bars plus an array of food, beverage and souvenir vendors scattered throughout the stadium.

A 1998 economic report prepared for the Downtown Phoenix Partnership by Valley economist Elliot Pollack noted that "the stadium and its associated restaurants account for approximately 94 percent of the increase in Downtown restaurant sales, with most of the sales captured by the ballpark's concessions stands."

As a result, Pollack noted, nearby businesses suffer.

"Apparently, visitors to the stadium are not traveling far beyond the stadium proper itself, perhaps due to the closeness of parking facilities in the warehouse district."

And this was before the fall, when Phoenix opened the 3,000-space Civic Plaza East parking garage located directly north of the ballpark. The parking garage will further concentrate baseball fans even closer to the stadium, sharply reducing pedestrian traffic that downtown restaurants and bars require to flourish.

Brian Mertz, bar manager of Fat Tuesday in the Arizona Center, says the garage, which was open for a few baseball games at the end of last season, had an immediate impact.

"We've lost a lot of business because of the parking garage right next to BOB," Mertz says. "We're three blocks away, and nobody wants to walk."

While a few bars -- Jackson's on Third, Cooper'stown, the Jefferson Street Grill and the Tee Pee Tap Room -- have flourished, at least on game days, the overall economic impact of the ballpark on the community remains murky.

Brian Kearney, executive director of Downtown Phoenix Partnership, says the value of BOB shouldn't be measured by the economic impact on neighboring businesses alone.

Instead, Kearney argues that the ballpark has helped create a "positive investment environment" downtown that is helping spur additional construction in the area.

Others would argue that BOB has had a negative impact on investment opportunities: The Diamondbacks sold $121 million in tax-free municipal bonds to help cover the team's share of construction of BOB. The bonds were sold through the Phoenix Industrial Development Authority. While the IDA is not liable for repayment of the bonds, the Diamondbacks' sale reduces IDA funds available for other projects. The tax-free bonds also amount to a federal tax subsidy to the Diamondbacks through lower financing costs.

Kearney points to new housing complexes, the construction of the Collier Center office and retail complex just north of BOB, and the recent groundbreaking for Phelps Dodge's new corporate headquarters as examples of businesses drafting in BOB's wake.

"BOB has made people feel that downtown has a future and is going to be a happening place for a long time," Kearney says.

Yet it's not happening enough for some. The city still has not secured the third major downtown hotel it so desires. Would-be hoteliers, such as a Marriott proposed for the Collier Center, demand significant city subsidies. In the case of the Marriott, the city had to offer to pony up more than $90 million in cash and loan guarantees, but that deal is tied up by litigation.

The Downtown Phoenix Partnership is promoting a site east of Seventh Street and south of the Southern Pacific Railroad tracks for the proposed Cardinals stadium. Kearney says downtown already has the necessary infrastructure to support construction of the Cardinals stadium and the facility could work in conjunction with the Phoenix Civic Center to host trade shows and conventions.

"We are clearly interested in maximizing the infrastructure that is here," he says.

Maximizing infrastructure isn't enough, say some downtown business owners.

Brian Weymouth, manager of Cooper'stown, says downtown needs to expand its focus beyond sports facilities.

"I don't believe the downtown is mature enough to survive just on BOB, because there is no entertainment district," he says.


Promoters of the Cardinals stadium are eager to minimize comparisons between BOB and the planned football stadium.

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