Olympia arena promises additional development
If you build it, will they come?
Published: February 19, 2014
“$200 million’s not going to build you an entirely new swath of downtown; I think that’s pretty clear,” he says. “If it’s at least $200 million, then sure, this really could take off, but I can’t think of an arena anywhere that has” filled 45 blocks with development.
The deal would have a greater chance of success if there were a stipulation in the agreement that says a certain amount of construction has to be completed by a set date, deMause says.
He echoes other experts who say the success of sports facilities with proposed spinoff development varies from city to city. But, he says, “Whatever impact you get from a sports facility disappears as soon as you get a block or two away from it. It’s not like there’s no benefit, but it seems like it’s an awfully big public cost just to incentivize a project that may or may not happen.”
Tim Chapin, chair of Florida State University’s Department of Urban and Regional Planning, has studied the impact of so-called catalyst developments across the country.
“Some projects do a better job of spinning off development than others,” he says, but it depends on having a “good plan for the area around the facility, and not just a plan for the facility.”
How Olympia chooses to handle crowds, in particular with parking, will dictate the new arena district’s success, Chapin says.
Several new parking structures surrounding the arena were spelled out in the memorandum of understanding signed between Olympia and the DDA last summer as possible projects that could be constructed.
Chapin says spinoff development is less likely to take place with “facilities that surround themselves with … big parking structures [so] people can walk across the skywalk into the facility, without ever having to step [out of] the arena.”
Momentum plays an integral role, says Chapin, who hasn’t followed the development of Olympia’s deal. Deals like Ilitch’s catalyst development that have been successful have “other projects that are linked to, or otherwise sort-of planned concurrently with the investment,” he says.
“The arena doesn’t change real estate markets," Chapin says, “but the arena can be synergistic with nearby projects.”
Nearby momentum isn’t a guaranteed slam-dunk, though, Chapin says. A developer can’t “just plop an arena down in a really beat area and assume good things [will] happen,” he says. “These projects tend to not be good lead projects. They tend to be good next-wave projects.”
Detroit Emergency Manager Kevyn Orr acknowledged to Bloomberg last summer that questions surrounding large-scale arena deals — including “Does this really pan out? — are common, but Detroit needs all the help it can get, despite the concerns.
“The reality is we are so needy of some economic development, I can’t see how we don’t pursue it because, if we don’t, what’s left?” he said.
As DDA spokesman Rossbach put it to Metro Times, it’s Olympia’s prerogative to follow through with the spinoff development. And under the agreement, Olympia is obligated to secure or fund $200 million of additional development — if the company wants to receive additional funds from the DDA for spinoff projects. As city documents have shown and project backers have reiterated, that could mean anything: parking structures, retail, offices, housing, restaurants. Anything, really.
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