Can baseball rebuild a city?

Commentary about business and finance.
March 31 2004 3:49 PM

Buy Me Some Peanuts and Cracker Jack

Also some hotels and low-income housing.

Petco Park: more than a ballpark
Petco Park: more than a ballpark

On April 8, the San Diego Padres will christen Petco Park, the latest in a series of postmodern ballparks and yards (never "stadiums") to grace large American cities. Baseball-friendly in scale, intimate and asymmetrical, Petco belongs to the same nostalgic family as Camden Yards in Baltimore and SBC Park in San Francisco, to name a few. But unlike many recent stadiums, Petco is a ballpark that may do more than just provide an all-American atmosphere of retro-cool and expensive parking. It also seems to be living up to its promise of revitalizing a run-down urban area.

For a few decades, baseball and football stadiums have been sold to a credulous public as economic development schemes. The proposed new stadium for the New York Jets is being touted as the cornerstone for development of Manhattan's long-neglected far West Side—not as a taxpayer-financed concrete-and-glass white elephant for a perennially underachieving franchise, which will sit empty 355 days a year.

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In theory, baseball stadiums—with their heavy schedules and fair-weather season—have greater ability to bring lasting economic impact to a region. Many cities that lack 24-hour downtowns see stadiums as a quick means of creating them. But neither the good baseball stadiums (like the 10-year-old Ballpark in Arlington) nor the silly ones (like Phoenix's Bank One Ballpark) have triggered the creation of walkable neighborhoods. Rangers owner Thomas Hicks' grand promises to develop the 200-plus acres he acquired around the Ballpark have been slow to materialize. Indeed, most stadiums have flopped as economic development strategies. Just stroll a few blocks west of Camden Yards, for example—if you dare.

As a result, community elders who approve public cash for stadiums frequently end up looking like chumps, especially when the teams fail to match the public's investment. The Milwaukee Brewers have repaid Milwaukee's generosity in building Miller Park by slashing the payroll and fielding a team that might have difficulty competing in Triple A.

But San Diego may have learned something from the blunders of its American and National League rivals. For the deal that created Petco Park (the house that ruff built?) ensured the city would get some development bang for its bucks. And even before opening day, some results are visible.

The city of San Diego and the Center City Development Corp.—the city's economic development arm—paid to assemble the land for the stadium and floated bonds to help finance its construction. (The city financed about $300 million of the stadium's $454 million estimated cost.)

According to a 1998 Memorandum of Agreement between the city and the owner of the Padres, software mogul John Moores, Moores would have to make significant investments in the surrounding (and derelict) East Village neighborhood. The $169 million in bonds that the city sold to help build the park are to be paid back through a combination of hotel occupancy taxes and property taxes. Moores pledged to build enough hotels and commercial and residential properties to generate those new taxes. In all, Moores was required to create some $300 million in projects.

And so, as construction crews were furiously rushing to complete Petco, Moores began to develop the adjacent property parcels. Through his company, JMI Realty, Moores built a 512-room Omni Hotel, slated to open next week, with expensive condos on top. JMI is also overseeing the development of a four-block area that includes a completed low-income housing building and fancy condos. As the construction trade publication Engineering News-Record  noted in March, JMI has "either self-developed or engaged others to develop $593.3 million of hotel, residential, retail, and parking structures."

Sniffing the irresistible perfume of gentrification, other private-sector developers, who have nothing to do with the Padres or the ballpark, piggy-backed on Moores' efforts. The Parkloft, a loft-style apartment building, was completed last summer. Another condo project, Diamond Terrace, was sold out before its completion. A housing project for seniors is open. And at least a dozen more projects are in the works or in the planning stages—mostly high-end residential lofts and condominiums pitched at empty-nesters and other new converts to New Urbanism. The Center City Development Corp. has a list of projects in the East Village area that, should they all come to fruition, would represent private-sector investment of about $1.2 billion and create about 3,700 housing units.

Indeed, the sales of condominiums, and the desire of other developers to build in the area, proves there is demand for new, untraditional housing in a region where land is increasingly scarce and new homes are expensive. Of course, the development is only coming about because the city put a gun to the head of a team owner eager for a new stadium. But in a region of the country noteworthy for its resistance to urbanism, that still counts as progress. "It's a remarkable ballpark, and the peripheral development that they talked about is happening," said Andrew Zimbalist, a Smith College economist and frequent critic of public-private stadium deals. "Whether or not it all comes to pass, it does appear to be a promising situation down there."

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