The past two years have seen rapid growth in sports, amusement and recreation facilities. However, construction is taking a breather from this expansion, and metro areas like New York are running out of sports teams needing new venues. FMI Corp., Raleigh, N.C., forecasts that growth will slow to 7 percent for this market, or $26.1 billion for 2008, down from a 9 percent growth rate in 2007. Despite this slowdown, however, the growth rate still is higher than the current national average for economic growth, which was 3.9 percent in the third quarter of 2007. Sports, amusement and recreation facilities include racetracks, equestrian centers, riding academies, bowling allies, rifle ranges, pool halls, driving ranges, theme and amusement parks, theaters, fitness centers, performance and meeting centers, sports venues and casinos. The importance of these facilities to a community goes beyond providing recreation and entertainment. All serve as community focal points that attract people and businesses. The economics of added jobs, cash-flow turnover and outside investments often are arguable, but factors like community pride may tip the balance for many new projects. In addition, with the recent fires in California and the hurricanes in the Gulf Coast, there is an unintended new use for large sports venues: temporary shelter.
While the New Orleans Superdome provided shelter after Hurricane Katrina, the return of sports venues and casinos are proving to be anchor attractions for a region struggling to rebuild its economy. In the Gulf Coast, gaming is recovering faster than housing and promises to help the recovery even more as casinos now are allowed to be sited on solid ground. The intention is to attract even more tourists and a supporting structure of hotels, stores and entertainment venues. Gaming is strong across the country, as noted by the American Gaming Association, Washington, D.C. According to the “2007 AGA Survey of Casino Entertainment,” gross gaming revenues grew 6.8 percent in 2006 to a total of $32.42 billion in the U.S. There currently are 37 states with some form of legalized gaming, including 460 commercial casinos, 36 racinos (gaming and horseracing combined) and 372 casinos operated by American Indians. Projects like the recently announced Las Vegas Plaza, which has an estimated cost of $5 billion and is planned to open in 2011 with restaurants, a shopping mall, hotel and gambling, typify multi-use venues for most new developments in this construction category.
The project will join several other projects of that magnitude currently in process in Las Vegas. However, what starts in Vegas does not necessarily stay in Vegas. As casino gambling proliferates, expect that the competition will require the construction of even more attractive venues. At some point, the field will be at least temporarily saturated. Some venues are bound to experience lower revenues, but that point has not yet been reached, and Nevada still holds a strong lead in the market.
With a spate of new sports stadiums recently completed, under construction or planned, one might think this market also might reach a saturation point soon; that will not occur until a number of new high-profile projects open in the next few years. Some of the larger notable professional sports stadiums include the Washington Nationals Park at a cost of $611 million; Lucas Oil Stadium for the Indianapolis Colts with a retractable roof and $625 million price tag; Yankee Stadium and new infrastructure that will cost $900 million; Citi Field for the New York Mets, which is priced around $700 million; Dallas Cowboys’ new stadium with retractable roof, which is estimated at $1 billion; a stadium for the Minnesota Twins, which currently is estimated at $522 million; and a combined stadium for the New York Jets and Giants in the Meadowlands. In addition, the Oakland Athletics are waiting approval to build a new Cisco Field and Baseball Village. Other large projects in the recreation category include concert halls and performance centers, including a performing arts center for Sam Houston State University in Huntsville, Texas, with a cost of $30 million, and the Kaufmann Center for the Performing Arts in Kansas City, Mo., which is expected to cost $326 million. Such venues will offer a different type of cultural experience from gaming and sporting arenas, but, nonetheless, are a boon to the growth of communities and cities looking for revitalization and modernization. All these factors plus new ways of funding projects through public, private and individual contributions will ensure construction for sports, amusement and recreation projects will remain strong for the foreseeable future.
John Hughes, vice president of FMI Corp., Raleigh, N.C., works with national manufacturers of construction products and equipment; distributors; retailers; and industry suppliers in the areas of strategy, channel assessment, customer development, organizational development and training, and market research. He can be reached at firstname.lastname@example.org or (919) 785-9224.