Expert: Downtown Stadium Doesn’t Mean Economic Growth

With a deal to build a new soccer stadium in East Downtown finally mostly in place, residents and businesses already living and doing business there might expect to see some positive changes once the facility is built. But experts say economic growth isn’t guaranteed unless the project is done right.


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“This entire region of the city has been growing.”

Jim Curtis is a manager at Lucky’s Pub, a busy bar along Rusk and across a parking lot from the weeded-over empty lots that could be home to a new soccer stadium in a few years. Lucky’s already shows Houston Dynamo games on television and will be one of the closest venues to the new stadium once it’s built. Curtis says for Lucky’s, the stadium means continued economic growth.

“It just brings new business to the area. We’ve got a couple of new businesses going up on the other side as well and as much as some people might think of that as competition it just brings more people to the area.”

But despite what on the surface seems like an uncontested goal, some aren’t so sure downtown sports facilities actually spur economic growth. Andrew Zimbalist, a noted sports economist, says you can’t just plop a stadium downtown and expect the area around it to flourish.

“A sports facility by itself cannot be expected to boost the area economy and when we say area economy we’re talking about the amount of output in the area and the number of jobs in an area. The evidence simply does not suggest that one could reliably depend upon any type economic boost whatsoever.”

Zimbalist says downtown projects that have been successful in other cities have usually included a commitment by the city, county or team to invest in the surrounding area. The City of Houston and Harris County have agreed to contribute $10 million each to the project. The Dynamo will spend $60 million on the stadium. But Zimbalist says just because soccer fans spend money in and around the stadium doesn’t necessarily mean a net-benefit for the city as a whole.

“If I take my family to a soccer game and I spend $100 at the stadium doing that, that’s $100 that I can’t spend at a local theater or a local restaurant. Instead of spending the money in one part of Houston on one kind of entertainment, I spend it on another kind of entertainment in another part of Houston. In that circumstance there’s no net benefit to Houston. It’s just transferring money from one area to another.”

Tina Araujo is with the East Downtown Management District and says regardless of what economists say, she’s expecting East Downtown to benefit from the new stadium, but it won’t happen overnight.

“What we would expect is that more entertainment type businesses will be interested in looking at East Downtown as a possibility. Whether they’ll select East Downtown is another thing. But I think more businesses, entertainment, restaurants and also we’re hoping other types of commercial businesses that support the residential growth there will look at East Downtown more seriously.”

Houston’s other downtown sports facilities have spurred modest economic growth, but that growth has been slow, with empty buildings and lots still dotting streets around Toyota Center and Minute Maid Park.

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