From Myrtle Beach, South Carolina to Las Vegas, Nevada, municipalities once happy to host the occasional regional sports tournament are finding far greater ambitions can be pursued with the right partnerships. With an eye on potential new revenue and tourism, youth sports and community recreation resources can be transformed into assets that not only enhance the health of local residents, but also become an economic development and tourism engine for the city or county.
Public-private partnerships take shape in a variety of ways: publicly owned assets operated by professional management firms, publicly owned assets leased to private sports clubs or event providers, and private developers seeking public partnerships for land acquisition or funding support as part of a larger mixed-use development. This can be seen in the massive baseball complexes that for-profit company Big League Dreams develops and operates in Mansfield, California, and a few other locales. These partnerships are represented in the broader, state-of-the-art, sport, recreation, and event complexes operated by the Sports Facilities Companies (SFC) in places like Gatlinburg and Hoover, Alabama on behalf of their municipal clients. It’s also seen through business arrangements helping to ensure economic impact in places where the goal once was simply to see the diamonds and courts used more often.
Image courtesy of Rocky Top Sports World
In the shadow of the Great Smokey Mountains, Morristown, Tennessee had been planning to develop a major multi-functional facility for years, for both local recreation, regional sports, and regional meetings. Plans and feasibility studies came and went. Ultimately, the city recognized that it could use help from the private sector.
“Morristown has been in need of a community rec center for decades,” said City Administrator Anthony W. Cox. “When we started looking at the challenges of operating that facility, making sure what we had was the right thing for our community, it was over our heads.”
The city built Morristown Landing, a $30 million-complex with an aquatic center, four basketball courts/eight volleyball courts, and a conference center, using municipal bonds. Morristown hired SFC to operate the facility with a tax subsidy expected to run about $750,0000 a year initially. Morristown Landing opened in April of this year.
“They (SFC) have a depth of experience and people who’ve been there before. They have ideas of what’s worked and what hasn’t, and they were able to advise us on what the demand would be in terms of our community and the region,” Cox said. “Morristown Landing needs to generate tourism. It needs to support the quality of life for our people. We need multiple things to happen at this facility,” Cox said.
Developers are seeing what the convention and visitors bureaus everywhere have been advocating to city councils forever: sporting events can have the same kind of economic impact for communities as theme parks and natural wonders. It’s a big economic impact, calling for bigger, more multi-functional facilities.
“Unlike what most cities or counties can do on their own, some of the privately built floor or turf sports complexes now are even putting together packages with the more traditional trimmings of tourism: hotels, restaurants and retail,” said Heather Gibson, a professor at the University of Florida’s Department of Tourism, Hospitality & Event Management.
“That’s been the big trend,” Gibson said. “The new private ventures are designed where you have the hotel sector with the event sector, with the food and other entertainment sectors.”
Before the COVID pandemic, sports tourism was growing globally at an astonishing rate of about 14 percent per year and had reached the neighborhood of $600 billion in direct annual revenue, according to research presented at the United Nations’ 2021 Sports Tourism Congress held in Spain.
In Overland Park, Kansas, Price Brothers have created a mixed-use private development anchored by a massive 420,000 square foot indoor sports complex that will open in Spring 2024. Their live-play-shop-dine development was partially funded by $49.3 million in Sales Tax and Revenue (STAR) bonds, “a financing tool that allows Kansas municipalities to issue bonds to finance the development of major commercial, entertainment, and tourism projects” according KansasCommerce.gov. The bonds are later paid off through sales tax generated by the development. In addition to the Advent Health Sports Park at Bluhawk, the development includes retail shops like Cosentino’s grocery and TJ Maxx clothiers, restaurants such as Red Door Grill and Whataburger, and wellness providers including eye care, chiropractic care, and veterinary services.
Gibson’s colleague at the University of Florida’s Department of Tourism, Hospitality & Event Management, Assistant Professor Nasim Binesh, offered that there are numerous benefits to communities partnering with for-profit companies for facility development or management. Niche businesses can bring specific resources, experience, and knowledge in areas such as marketing, sales, and event management. They may have national networks that allow them to negotiate better terms for any one venue, and access to more sponsorships, and other ways to commercialize events.
“It’s mostly because the municipalities and other organizations seek to maximize revenue and to minimize (ongoing-taxpayer) costs,” Binesh said.
Beyond that, Binesh said the professional companies are generating something many municipalities may not have provided in large part; analytics on managing venues. “It’s something that had been sorely lacking from a long time”, she said. “Now that it’s becoming more available, it’s changing the game.”
However, there are drawbacks to some for-profit partnerships, she cautioned. With thousands of new visitors playing on the weekends, community residents can feel they are losing access. Priorities can change and privatization can lead to fragmentation. Sometimes residents struggle to determine which public services are being supported by which private partners.
On the other hand, private development also can alleviate some of the risks that cities may face.
The same convention and visitors bureaus that have been pushing beaches and mountain trails are promoting the new breed of sports “mega-plexes” just as they might a theme park. Examples of these partnerships can be found in Panama City Beach, Florida and Gatlinburg, Tennessee. Cities are providing city-owned facilities to the private management companies, in exchange for flat fees of return. Beyond that, other considerations include tax relief offered for land and tourism tax subsidies.
Image courtesy of Cedar Fair Entertainment
In 2017, Cedar Fair Entertainment Company, owner of the famed Cedar Point Amusement Park in Sandusky, Ohio opened a $24 million outdoor sports complex in partnership with Lake Erie Shores and Islands convention and visitors bureau and Erie County. The project was so successful, that in early 2020 the same team came together to open a $32 million, 145,000 square foot indoor facility with the additional partnership of Firelands Regional Medical Center.
While this is a for-profit business, the real goal is self-sustainability while maximizing economic impact through hotel room night bookings; a key driver from the County who assisted with the majority of the funding for the projects through a 2015 increase in Erie County bed tax. The facility has been recognized as a leader in the industry multiple times – as a Champion of Economic Impact award in 2017 (Sports Destination Management) and Corporate Investment and Community Impact “CiCi” Top 15 Community Impact award in 2021 (Trade & Industry Development).
“All of that is negotiable toward a broader city-oriented tourism marketing effort”, said Lisa Delpy Neirotti, Associate Professor of Sport Management at George Washington University.
“They’re taking the same business approach they have with the convention business, where most city convention centers are run by private organizations,” Delpy Neirotti said. “They have professionals running it that have best practices, economies of scale, and connections with tournaments.”
Image courtesy of Cedar Point Sports Center
Seminole County, Florida is a centrally located suburban area that has invested heavily in youth sports tourism in the past decade. The county built a $30 million field sports venue named Boombah Sports Complex, and then leased much of its inventory to the for-profit baseball events company, Perfect Game. Seminole works with other partners to fill the rest of the schedule. “We really see sports tourism as a strong driver of tourism throughout the county,” said Danny Trosset, Seminole County’s Director of Sports Tourism.
From May, 2016, to October, 2022, Boombah hosted 350 events, 19,700 teams, and 841,000 visitors, he said. They accounted for 128,000 hotel room nights in the county.
“It’s a good agreement because they [Perfect Game] are driving a significant amount of visitation to our area. They’re filling our hotels just about every weekend with their teams,” Trosset said.
Traditionally, sports and recreation assets were mostly used by neighborhood kids and other citizens, however, they are now being purpose-built to drive economic impact for their communities as well. The importance of this dual responsibility has led many communities to turn to private operators. While this strategy is not undertaken lightly, with positive results in many parts of the country, these partnerships and the benefits realized will be around for a long time to come.