Creative Cities and Major League Soccer

The economic crisis has taken its toll and though Virginia seems to be weathering the storm better when compared too much of the rest of the country, it’s hardly time for complacency.

While the jury is still out, Virginia seems to have a capable, economic growth-minded Governor in Bob McDonnell. He seems to be walking a careful line between much-needed visioning (Virginia an energy hub? Bring it on!) and making the hard decisions to evade the eventuality of fiscal strangulation.

But, as thinkers like New Geography’s Joel Kotkin, Harvard economist Edward Glaeser and blue chip urbanist Richard Florida have tirelessly explained: the confluence of business, capital and jobs is only one piece – albeit a very important one – of the puzzle. Virginia’s cities also need to embrace the reality that quality of life is not merely an afterthought, but a key element in the development of creative cities.

During a stint at a New Jersey economic development agency, I did a lot of research studying the common elements of the country’s most innovative research parks. The results might surprise you. Long gone are the stale, antiseptic clusters of yesteryear. Research parks today aren’t just housing tech companies and incubating new enterprises, but are jam-packed with amenities such as cafes, services, stores and even graduate schools and sometimes residences. Essentially, they function as self sustaining communities in their own right and mimic civilization’s most quintessential, freeform laboratory: the city.

This evolution from beige boxes and asphalt to urban villages represents an acknowledgement from business and policymakers alike of the importance of place and lifestyle in the formation of ideas and the incubation of talent. And if we are to turn this equation backwards, the same forces that are understood to be propelling the development of research parks are equally critical in the city.

Richmonders are no stranger to this concept, of course. Virginia’s flagship metropolis boasts world-class parks, museums and an outsized presence of amenities. Perhaps it’s no coincidence that the relatively small Richmond area is home to no less than six Fortune 500 companies, a factoid that only scratches the surface of the corporate depth in the Richmond area.

But as any Virginian can attest, there remains a gaping hole. Despite Virginia’s relative wealth, economic dynamism, corporate depth, and sizeable population, we have been luckless in our fitful pursuit of major league sports.

Now, I’m hardly here to make the audacious claim that major league sports are the answer to Virginia’s economic ills. However, it’s worth considering the value of a major league team as a quality of life asset in attracting talent, business and tourism.

From a purely economic standpoint, despite the usual cries of sports-advocates there is no clear evidence that professional sports and its attendant infrastructure are worth the usual outlay, assuming that large amounts of public money is used. Of course, this needn’t necessarily be the case, as San Francisco’s SBC Park and New York’s Citi Field both ably demonstrate.

Nonetheless, if we presume that public funds are used in some way, predominant economic literature tells us that such expenditures too often do not pay off in a dollar-for-dollar way. Using that perspective, the costs associated with hosting major league professional sports teams are routinely trashed in op-ed pages and town halls.

However, these reactions rarely consider the impact that stadiums, and their attendant development, have on overall economic development. Difficult to calculate, but compelling nonetheless, there is evidence that public investments in professional sports infrastructure can touch off economic ‘multipliers,’ or indirect benefits that are accrued as a result of stadium development. For example, a new stadium can provide a wealth of construction jobs, spur the growth of related businesses, kick off sales of merchandise, and, less studied, provide instant marketing and visibility for a region.

Still, there is no clear consensus. But yet, for all of the vocal disdain for public financing of stadiums, voters continue to approve them anyway, and relatively routinely. And there’s a reason – quality of life. Though even more difficult to quantify, quality of life is an important consideration that needs to be accounted for when studying the economics and public policy of professional sports.

In a 2001 article in The Economic Review, a publication of the Federal Reserve Bank of Kansas City, economists Jordan Rappaport and Chad Wilkerson say that quality of life is a possible saving grace for stadium proponents. Considering referenda on stadium financing and quality of life surveys, Rappaport and Wilkerson found that residents often highly value the role of major league professional sports as an amenity in their community, despite the costs. But it’s worth repeating that public financing needn’t necessarily be the only option. Also, there are ways to publicly finance development without raiding the general fund. Responsible tax increment financing, or bonding on anticipated tax revenues, could conceivably fill a very large financing gap.

Given the powerful effects of major league sports on quality of life, on promoting a region and the tantalizing prospect of bringing a big, fat amenity to Virginia, perhaps it’s time we got serious about major league sports.

Personally, I’d like to see Richmond get a major league team for America’s fastest growing sport – soccer. According to recent data, Major League Soccer is the third most popular sport in the US in terms of attendance, outstripping the NHL and even the NBA. Unlike other sports, soccer is quickly growing in popularity with ample expansion opportunities, especially given newer generations’ love for the game and the rapid growth of the US Hispanic population. And what speaks to globalization’s reach better than ‘the beautiful game,’ as it’s often called?

In practical terms, MLS is also a bargain compared to the shocking sticker prices of other major league franchises. Its stadiums are lower capacity and far cheaper, and in Virginia there is potential fan base aplenty when you add up the population of metro Fredericksburg, Charlottesville, Hampton Roads and Richmond-Petersburg.

Of course, naysayers might point out that DC has a franchise. Yet all that says to me is the makings of a winning I-95 rivalry. In addition, MLS could land a long-coveted ‘southern’  team, answer lingering questions about its 2012 expansion plans, and Virginia could finally get itself a major league team. Although expansion plans in the bigger leagues – football, basketball and baseball – aren’t happening for the foreseeable future, a vibrant and viable MLS franchise in Richmond could help make that case down the road.

Doubters should also ponder the success of other major league sports in other smaller markets (Buffalo, Milwaukee, New Orleans, etc.) as well as in MLS – Salt Lake won last year’s MLS Cup. And like the outrageously successful Seattle Sounders (now in its second season), Richmond could build on our solid and proud, if woefully-named, Kickers squad.

There’s nary a commandment writ that consigns Virginia to an eternal dearth of major league sports. And aside from all the economic gobbledegook, I say it’s high time that this be rectified – and a soccer team may be the closest, best chance that Richmond will have for a long time.

I say, let’s get this thing started.