Providence Soccer Stadium Could Create 1500 Jobs and $2 Billion in Economic Impact

Wednesday, December 10, 2014

Kate Nagle, GoLocal Contributor

You do not have to look far to get a glimpse of what the costs and benefits of a new soccer stadium would be in Providence, RI.

Washington, DC has given the green light to build a new soccer mega-stadium complex for their Major League Soccer franchise (MLS).  The DC project is significant and designed to revamp an entire section of the city - Buzzards’ Point along the Anacostia River. The benefits are projected to be massive too. 

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

The DC project is the biggest MLS soccer stadium development in the US and is both a sports complex development and the reclamation of that section of the city complete with hotel and amenities. Washington is banking on thousands of permanent jobs and billions in economic growth.  

Two weeks ago, GoLocalProv proposed that Providence compete with Boston for the often discussed stadium for the New England Revolution. Presently, the Revolution play at Gillete Stadium, a football complex.  In the recent MLS Eastern Conference playoff game, the Revolution drew a crowd of 32,000 in Foxborough and the stadium seemed less than vibrant with 20,000 empty seats.  

The City of Boston has floated the option of a new stadium for the Revolution franchise at a location which is a strip of land between I-93 and and an MBTA Maintenance facility on the outer edge of the city. 

Bob Kraft, who owns both the New England Patriots and the Revolution, flirted with both Providence and Hartford to relocate his NFL franchise in 1998.  In Hartford, then Governor John Rowland and Bob Kraft held a press conference to announce the relocation of the team to Hartford. “'Today, Mr. Kraft joked that he had driven from Boston to Hartford in the same time it took him to get out of the parking lot at Foxboro Stadium. And later, he apologized for choking up as the crowd erupted in yet another wave of cheers. 'You really overwhelmed me,' he said," according to an article in the New York Times in November of 1998.

For Providence, a city which has not had a major construction project in a decade, the idea of a top-level pro-franchise has received support from economic development leaders and sparked thousands of comments, likes, and shares on social media. 

“Projects of this type often rely on economic impact studies to determine if the project is of value to public and private investors. The studies measure the direct and indirect economic benefits of such a project using one of three nationally recognized regional input-output models,” said Dr. Edward Mazze, Distinguished Professor of Business Administration at URI.

Big Potential Payoff in Washington, DC  

According to the cost-benefit analysis documents developed for the District of Columbia and obtained by GoLocal, the price tag of the project is $286.7 million facility and development.  DC will contribute 46% of the project cost. 

The benefits of the DC Project are significant according to the report:

• The net new direct, indirect and induced spending created in the District is estimated to be a combined NPV of $2.6 billion over the period of 2015 through 2046. This level of combined net new spending is estimated to support 1,683 new full-time equivalent jobs (FTEs), including both full and part-time jobs. These new jobs will generate personal earnings of an estimated Net Present Value {NPV) of $1.3 billion over the period of 2015 through 2046.
• Estimated net fiscal benefits of the Stadium Act over a 32-year period are positive. It is anticipated that benefits would exceed costs by approximately $38 million ($109.4 million when including the proceeds from land exchanges).

For Washington DC, this investment is just the latest in an ever growing number of projects to enhance the city and grow its economic base. The District records an unemployment rate of 7.6% and the metro region is one of the lowest in the United States   The city of Providence reports a 10 percent unemployment rate and RI’s unemployment rate continues to be one of the three highest in the country.

Public Investment Versus Private

The growth of major league soccer has sparked the development of soccer venues in most of the host cities around the country.  The level and structure of the public investment varies dramatically from three cities that have been 100 percent privately funded - Columbus, Los Angeles and San Jose - to cities that have built major projects with public funds in excess of $100 million.  Those projects heavily backed by public funds include franchises Colorado, Kansas City, New York and the just approved Washington, DC.

Due Diligence is Critical

For Mazze, he argues that Providence and state leaders need to look at eight critical factors:

Providence needs to collect the following information before moving forward on this opportunity: (a) the interest of Rhode Islanders in bringing a professional sports team to the state in regard to attendance and spending, (b) the number and kind of employees needed and their potential wages to construct the stadium, and manage the stadium when completed, (c) the "best use" of the land where the stadium will be located, (d) who would be responsible for environmental remediation costs, if necessary, (e) the funding responsibilities of the private investors, (f) what happens if there is non-performance on the part of the developer, (g) the cost to the city and state of property or other tax exemptions, (g) the past financial performance of the project originator, (h) the costs to the state and city for  municipal services, (i) the responsibility for funding future stadium renovations and improvements and (j) the terms of the agreement with the team and stadium owner. 

“Weak responses to any of these questions could be a deal-breaker. The larger the up-front investment by the owner of the team and stadium along with the experience of the owner in sports management are good indicators that a deal should move to the next stage,” said Mazze.

---

Related Slideshow: New England Revolution vs. LA Galaxy - MLS Cup final

Related Articles

• EDITORIAL: Bring the New England Revolution to Providence - We Know the Perfect Spot
• RI Leaders Support Effort to Bring Revolution to Providence
• NE Revolution Announce Viewing Party Locations For Sunday
• MLS Cup Final - The Biggest Game In Revolution History?
• What to Watch For: MLS Cup Final - Revolution vs Galaxy
• Revolution Supporters Fill StubHub Center
• GoLocal is Going to Los Angeles to Cover the NE Revolution’s Quest for the MLS Cup
• Revolution Fall 2-1 To Galaxy In MLS Cup Final
• Revolution Unable to Top Red Bulls, Drop Second Straight
• Revolution to Host U.S. Open Cup Game in Providence
• Revolution Unable To Overcome Costly Penalties, Drop Fourth Straight
• Revolution Player Scott Caldwell Makes Surprise Appearance at Juventas Practice
• Red Hot Revolution Advance To Eastern Conference Finals With Big Win Over Crew
• Revolution-Red Bulls Prepare For Eastern Conference Finals
• Scene Set For Revolution vs. Galaxy MLS Cup Final Matchup
• Revolution-Galaxy Key Matchups: MLS Cup Final
• Jones, Bunbury Carry Revolution To Crucial Road Win
• Davies Double Dip Leads Revolution To MLS Cup Finals

Enjoy this post? Share it with others.