PHYSICAL AMENITIES
Convention centers, sports stadiums, museums and similar attractions intended to attract tourists and capture disposable income have gained increasing popularity as economic development strategies. Fenich (1994) conducted an analysis to determine the effectiveness of New York City's Jacob Javits Convention Center as an economic development tool.
When the Javits Center was proposed, proponents argued that a new facility was needed to maintain or improve the city's comparative advantage in attracting conventioneers; they said the center would serve as a tool for economic revitalization. The Javits Center replaced the Coliseum, which provided convention space until the new facility was built.
Fenich's analysis determined that the Javits Center has attracted more than 1.5 million out-of-town convention attendees each year and has hosted local events that have served about an equal number of people. The Center stimulates over $1 billion in direct spending by attendees, with a total economic impact of over $2 billion annually. The state and local taxes generated more than offset the operating costs and debt service, yielding net fiscal benefits, but only if the Coliseum is not considered in the equation.
If the revenue generated by the previous facility were factored into the equation (revenue that was generated without the additional expense of building a new facility), the Javits Center's revenues did not cover its expenses. Furthermore, the Javits Center did not lead to physical revitalization in the immediate area. Fenich found no evidence of spin-off development.
American cities have gone on a building boom of sports stadiums in recent years. This trend has swept cities large and small, as they have sought to attract or retain both major and minor league teams and other sporting events.
Rosentraub, Swindell, Przybylski, and Mullins (1994) studied the impact of Indianapolis' sports and downtown development strategy. The city adopted an economic development strategy that relied heavily on sports and invested very large sums of money to build new facilities. The research team found Indianapolis' focus on its downtown and sports as a development strategy was associated with a general trend of increased employment and economic growth.
However, the strategy did not bring more growth than was experienced by other Midwestern communities and did not lead to a concentration of higher paying jobs in the region. Downtown employment stabilized, but this could be partially attributed to expansion of the university and public sector. Furthermore, the trend toward job development in areas outside the downtown center continued. Despite the large investment, there was an inconsequential effect on economic growth.
Keys to successful land development strategies
Real estate development projects are primary components of many broader economic development strategies. Central cities and older suburbs, in particular, struggle with ways to redevelop or revitalize their residential, commercial and industrial landscape. A few common themes can be drawn from the evaluation literature. Whether dealing with commercial district revitalization, brownfield redevelopment or residential construction, it is important to have a thorough understanding of the opportunities and constraints relevant to the entire community as well as specific sites.
Economic developers should not limit their ideas to traditional land uses, but look to alternative solutions. It is important to create a clean environment where people feel safe and a variety of amenities are available. When considering large-scale projects such as sports or recreation facilities or cultural attractions, planners must recognize the possibility of substitution effects. If one activity simply draws resources from another activity in the region, no wealth has been generated.
Attractions must be able to draw visitors from outside the region to
truly result in economic development. Finally, in assessing the effectiveness
of land development strategies, many benefits may not be quantifiable.
Intangible benefits such as improvements in the general appearance of
a neighborhood and increased community pride may not be measurable impacts,
at least in the short-term.