Economic Impact of 10 Years of PETCO Park

Yesterday, both NBC 7 and FOX 5 reported on an economic impact study on the 10-year anniversary of PETCO Park that the National University System Institute for Policy Research (NUSIPR) released.

After a little begging and pleading on Twitter, Gavin (CT2SD) sent me a copy that he found thanks to a tip from Matthew Hall of the UT.

I figured we can take a look at and analyze the conclusions they came up with.

Now, I’m not an economist. I just want to make that clear from the start. Some of my thoughts and opinions will probably be wrong. Bear with me anyways. This is all just supposed to be informative, so let’s go.

Note: This “report” seems like it’s just a press summary to me. Gavin has sent a request to NUSIPR to find out if there is a more comprehensive version of this available to the public. He’s promised to share it with me.

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UPDATE: Gavin received a response from Erik Bruvold of NUSIPR regarding the report and if we could see anything more comprehensive released some time soon.

No one funded. What you see is what you get. We pulled together and did a bit of analysis on readily available public data (as indicated in the sources and notes). Just one of our “news and notes” pieces.

So, there you go.

1) PETCO Park’s opening was instrumental in helping accelerate Downtown’s development as a residential community.

  • Between 2000 and 2013 Downtown San Diego added 15,000+ residents (17,513 to 32,544).
  • Between 2000 and 2012, Downtown San Diego added 14,700 housing units. (9,454 to 24,168).
  • Approximately 4,000 of the housing units in 2013 were estimated to be vacant – suggesting both that downtown’s development has attracted buyers of second homes as well as the challenges experienced in downtown’s rental market.

The first thing I thought of was that 4 years after PETCO opened, the country went into an economic tailspin that it has yet to recover from. Every time it looks like the economy is starting to come back, some dumb thing happens. So that would partially explain the 4,000 units being vacant last year.

Still, an additional 15,000+ residents in those newer 14,700 units. That looks pretty good overall.

2) PETCO Park’s opening did not change the underlying dynamics of Downtown’s employment picture.

Employment remains essentially unchanged, with 64,689 workers employed at 92101 businesses in 2004 and 64,718 working in downtown in 2011. Few new major firms focused on the “export” of products and services outside of San Diego have emerged in Downtown or relocated to the 92101 area.

These numbers don’t really surprise me. Just look at the first point: Downtown is becoming more of a residential community. Most of the corporate offices were already downtown. But the employees were living somewhere else.

3) Like many new sports stadiums, PETCO Park saw an initial spike in attendance but then a rapid fall off.

The opening of PETCO Park saw a 1 million spike in attendance over the final season in Mission Valley’s Qualcomm Stadium. Like many new parks opened in the past two decades, however, attendance has flattened out.

The opening of PETCO Park saw a 1 million spike in attendance over the final season in Mission Valley’s Qualcomm Stadium. Like many new parks opened in the past two decades, however, attendance has flattened out.

I blame the combination of that “new ballpark smell” wearing off and underperforming teams.

Here’s the historical attendance for the Padres dating all the way back to the 1969 season:

Year W L Finish Stadium Attendance Attend/G Rank
2014 0 0
2013 76 86 3 PetCo Park 2,166,691 26,749 12th of 15
2012 76 86 4 PetCo Park 2,123,721 26,219 14th of 16
2011 71 91 5 PetCo Park 2,143,018 26,457 11th of 16
2010 90 72 2 PetCo Park 2,131,774 26,318 11th of 16
2009 75 87 4 PetCo Park 1,919,603 23,699 12th of 16
2008 63 99 5 PetCo Park 2,427,535 29,970 12th of 16
2007 89 74 3 PetCo Park 2,790,074 34,445 9th of 16
2006 88 74 1 PetCo Park 2,659,757 32,837 8th of 16
2005 82 80 1 PetCo Park 2,869,787 35,429 5th of 16
2004 87 75 3 PetCo Park 3,016,752 37,244 7th of 16
2003 64 98 5 Qualcomm Stadium 2,030,084 25,063 12th of 16
2002 66 96 5 Qualcomm Stadium 2,220,601 27,415 10th of 16
2001 79 83 4 Qualcomm Stadium 2,378,128 29,360 12th of 16
2000 76 86 5 Qualcomm Stadium 2,352,443 29,043 11th of 16
1999 74 88 4 Qualcomm Stadium & Estadio de Beisbol Monterrey 2,523,538 31,155 9th of 16
1998 98 64 1 Qualcomm Stadium 2,555,874 31,554 7th of 16
1997 76 86 4 Qualcomm Stadium & Aloha Stadium 2,089,333 25,794 7th of 14
1996 91 71 1 Jack Murphy Stadium & Estadio de Beisbol Monterrey 2,187,886 27,011 6th of 14
1995 70 74 3 Jack Murphy Stadium 1,041,805 14,470 13th of 14
1994 47 70 4 Jack Murphy Stadium 953,857 16,734 14th of 14
1993 61 101 7 Jack Murphy Stadium 1,375,432 16,981 14th of 14
1992 82 80 3 Jack Murphy Stadium 1,721,406 21,252 9th of 12
1991 84 78 3 Jack Murphy Stadium 1,804,289 22,275 9th of 12
1990 75 87 4 Jack Murphy Stadium 1,856,396 22,918 9th of 12
1989 89 73 2 Jack Murphy Stadium 2,009,031 24,803 6th of 12
1988 83 78 3 Jack Murphy Stadium 1,506,896 18,604 10th of 12
1987 65 97 6 Jack Murphy Stadium 1,454,061 17,951 10th of 12
1986 74 88 4 Jack Murphy Stadium 1,805,716 22,293 6th of 12
1985 83 79 3 Jack Murphy Stadium 2,210,352 27,288 4th of 12
1984 92 70 1 Jack Murphy Stadium 1,983,904 24,493 5th of 12
1983 81 81 4 Jack Murphy Stadium 1,539,815 18,778 6th of 12
1982 81 81 4 Jack Murphy Stadium 1,607,516 19,846 6th of 12
1981 41 69 6 Jack Murphy Stadium 519,161 9,439 12th of 12
1980 73 89 6 San Diego Stadium 1,139,026 14,062 10th of 12
1979 68 93 5 San Diego Stadium 1,456,967 17,987 8th of 12
1978 84 78 4 San Diego Stadium 1,670,107 20,619 5th of 12
1977 69 93 5 San Diego Stadium 1,376,269 16,991 7th of 12
1976 73 89 5 San Diego Stadium 1,458,478 18,231 5th of 12
1975 71 91 4 San Diego Stadium 1,281,747 15,824 6th of 12
1974 60 102 6 San Diego Stadium 1,075,399 13,277 8th of 12
1973 60 102 6 San Diego Stadium 611,826 7,553 12th of 12
1972 58 95 6 San Diego Stadium 644,273 8,053 11th of 12
1971 61 100 6 San Diego Stadium 557,513 6,883 12th of 12
1970 63 99 6 San Diego Stadium 643,679 7,947 12th of 12
1969 52 110 6 San Diego Stadium 512,970 6,333 12th of 12
Provided by Baseball-Reference.com: View Original Table
Generated 3/26/2014.

I don’t put much stock in the fact that the Padres haven’t drawn 3 million fans to PETCO Park since 2004. As you can see in that chart, starting in 1996 the Padres had attendance totals above 2 million every year except one: 2009. And that year they were only about 81k shy of topping 2 million. Would it be nice to get 3 million? Sure. But it’s going to take a few years of consistent winning to do it, in my opinion.

4) Ballpark visitors spent $67.6 million in downtown San Diego in 2013.

Based on recent attendance figures, and estimates from Convention Sports & Leisure International, non-local attendees at PETCO Park ballgames generated $67.6 million in out-of-facility spending in 2013. This includes expenditures on dining, entertainment, transportation and overnight lodging.

Wait–So PETCO Park was the catalyst for almost $70 million in spending outside of the ballpark last year? That’s good, right? RIGHT?

5) Overall, PETCO Park visitors generated a $44.3 million regional economic impact in 2013.

Out-of-facility spending by non-local ballpark attendees in 2013 had a $44.3 million regional economic impact in San Diego County. This supported 791 year-round, full-time equivalent jobs.

Again, I’m no economist, but that sounds pretty good.

 

So, what have we learned from all this?

I don’t know. You tell me. Like I said…

I’m not an economist.

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I write something for Padres Public just about every week on Wednesday morning. You get a bonus this week! Lucky you! Follow me on Twitter, where I prove I’m not an economist just about every day.

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  • Padres Prospects

    A few thoughts.

    “SAN DIEGO UNION-TRIBUNE editorial states the study “provides powerful evidence that taxpayer investments in ambitious projects can have a big payoff.” The study, conducted by Texas-based consulting firm Conventions, Sports & Leisure Int’l, revealed that $355M in taxes will be generated from ’00-30 as a result of the baseball stadium’s construction, “significantly more than” the $301M in total public funding used to build Petco Park and “significantly more than had been originally expected.””

    http://www.sportsbusinessdaily.com/Daily/Issues/2010/07/Issue-209/Facilities-Venues/Study-Petco-Park-Generating-Greater-ROI-Than-Projected.aspx?hl=Stadium%20Corp&sc=0

    So that’s an $0.18 return for every tax dollar spent over a 30-year period. No economist, but I’d love to hear other ways that $300 mil could be spent and the expected return over that long of a period. Additionally, with the shortening lifespan of modern stadiums there’s no guarantee the team will still view Petco as viable by that time meaning a new investment would be necessary (the Braves just turned around after 17 years!).

    I’m also not comfortable attributing all of downtown’s growth to Petco. Granted it’s the crown jewel, but what about all of the work done to update the rest of Gaslamp with places that people actually want to visit? I think that had a MUCH larger impact on San Diego hosting events like ComiCon that provide a huge tax boost and has a true year-round impact.

    Not sure what started trolley construction but that has to have a decent impact on growth downtown. It allowed lots of people to have a moderately convenient way to get from Santee, Mission Valley, South Bay, etc. to downtown.

    Also isn’t this a huge strike in favor of not giving the Chargers a stadium downtown? The area has already been developed. You’re not going to put the stadium too far south because no one will want to go.

    Anyway, I’m sure some of what I brought up is completely irrelevant but this is a much larger discussion than a few stats that the organization or the Chargers might bring up shining a positive light.

    • Good points. Like I said, PETCO was the catalyst for most of the downtown development we’ve seen over the last 10 years.
      If the ballpark never happened, we may have seen some of the redevelopment that occured, but not anywhere near all that we have seen so far.
      The Local NFL Team’s stadium is completely different issue.

    • Great points. The picture could actually be worse. Assuming the bulk of the funding to build Petco was allocated in 2003, all the tax revenues generated moving forward should be indexed to 2003 dollar values – otherwise known as ‘then-year’ dollars. That way we’re comparing apples to apples.

      Money inflates over time and a dollar in 2030 will not buy what a dollar in 2014 buys. That means the tax revenues going forward are worth less, relatively speaking, than what they were worth in 2003. They buy less. So if we bring in $355M in taxes from 2000-2030, we might not break even at all when compared with what we spent to build Petco Park.

      I’ll caveat this by saying I can’t tell from either the sports business daily link Padres Prospects has above, or the UT editorial, if the firm doing the study made their calculations using all ‘then-year’ dollar values. They may have; if they didn’t, Joe Taxpayer got shafted on this deal.

      • Padres Prospects

        Informative and depressing!

      • ey215

        It’s also important to remember that the remaining bond payments on the $301 million will be paid in future dollars as well. Really, we won’t know until the bonds are paid off what the net loss/gain will be.

        If you take these reports at face value, Petco has been one of the few success stories in public financing of ballparks and even then a small one. Unfortunately, this success has and will be used to support other public financing of stadiums in areas that won’t be nearly as successful.

        I’m willing to bet here in the Atlanta area both the new Falcons and Braves stadium projects won’t come close to paying off (though the Braves one has a better shot). For sure with the Falcons’ stadium the money could have been spent in better ways.

        edit: Also that the tax revenue figures that will be attributed to the ballpark may have been gained in other ways due to the substitution effect. That and they will be estimated, therefore we may not be able to say for sure it was a complete success.

      • Great point on the bond revenue, thanks for commenting.

  • ballybunion

    The modest success of Petco might be due to the bargain basement construction cost – $267 million plus $35 million in overruns caused by a lawsuit stopping construction for a year. When you compare that cost to the ballparks in New York, the Petco price tag is staggeringly cheap. Then again, politicians are very expensive to buy back east, and nothing gets done unless everybody even remotely involved gets bought.