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Economic Impact of a Sports Facility

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Essay title: Economic Impact of a Sports Facility

Feasibility Study

Before a facility's economic impact can be determined, a feasibility study should be done to excite the community members about the facility. The purpose of a feasibility study is to "provide research information about the community, special interest groups, and its use as a decision making tool in the community" (Farmer, Montgomery, Ammon, Jr. 12). In essence, this study is done to assure the community that building a sports facility is right for them and that their money will not go to waste. It also let's them know why their area is the most feasible for the facility. It also gives them non-economic influences such as civic pride in their team. If they have more than just economic reasons to approve the stadium, they will not need that much more influence to vote yes.

The main points of the study should include estimated economic benefits to the owner of the team and facility, the short term costs along with term costs, and cultural or economic loses and benefits to the community. The cost of the study usually runs about $.08 per person in the community. (E.g. 75,000 people = $6,000 cost)

When doing these studies, the city offices need to hire outside firms and specialist such as accountants and economists. These people will bring credibility to the studies, which will look good to the people in the community. The weakness with hiring these outside firms is that they are in this for themselves and may not understand what you are trying to do. If they do not understand how this is intended to be a positive influence on your residents, they may not focus on the positive points as much as the officials would like.

When the financing of the facility needs to be determined, it forces the city officials to put together where the money they need is going to come from. They can take from the community, take from the owner of the teams, or hire an entirely new owner for the building.

Before a facility is built, there may be need to schedule dates for events in advance and collect deposits to help pay for the construction. By attracting a prime tenant immediately, many dates on the calendar will be filled and attracting a prime tenant immediately will put a nice sum of money into the development funds for the facility. Also, setting dates for other events can contribute to the facility funding. This will be beneficial when figuring in the financial part of the study.

The key elements in these studies are that first, the mission of the project needs to be clear and direct. For the people to understand where the study is going, they need to know what the study is all about. Next, it must be clear on who will be making the money and where will it be going. If the revenue of this facility goes to the owners and the players, there is no benefit to build a facility in the community. The people must have some benefit other than tourism. Third, is the facility appropriate? Fenway Park being built in New York would be a horrible fit due to the rivalry with the New York teams. The community should want to have the team and facility before building begins. Fourth, will the facility be large enough to hold the fans, or will it be too big? The size of the facility needs to be precise with the amount of interested fans in the area and tourism in that part of the year. Finally, will the facility be able to hold a variety of events? If a facility can only hold one event, it will be more difficult to bring money back into the community.

Estimated revenues for the facility do not have to come strictly from the community. Luxury seating and Personal Seating Licenses can be purchased before the final product is built. This is where most of the revenue will come from when it is complete.

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