Building an arena for the sake of trying to attract a major pro sports franchise to Austin isn’t a logical fit but building a new arena for the Texas Longhorns basketball team might be a logical fit. One should consider the demographics of Austin, Texas. Austin has a population of 2,008,300. The median income is $64,839. Forbes rated it #11 for best places for business and careers. It also ranks #4 for job growth and #17 in education. The Forbes website stated there are a lot of highly educated millennials in and around Austin. (“Austin, TX.” Forbes. Forbes Magazine, n.d. Web. 19 Feb. 2017.) The University of Texas has its main campus in Austin. There are two prominent athletic facilities. Darrell K Royal-Texas Memorial stadium is where the Texas Longhorns football team plays. The stadium has a seating capacity of over 100,000. It was originally constructed in 1924. However, it has been renovated several times since that year. This past season saw the Longhorns get their largest crowd to date for a football game when 102,315 came to watch UT vs Notre Dame. (“The Official Website of the University of Texas Athletics.” RSS. N.p., n.d. Web. 19 Feb. 2017.) The second main facility to consider would be the Frank Erwin Center. The Frank Erwin center is the arena for the Texas Longhorns basketball programs. It was created in 1977. It had some renovation work done in 2001 and expansion in 2003. The arena has seen over 25 million since it opened. It is nicknamed The Drum because it looks like a concrete drum. (“About the Erwin Center | Frank Erwin Center.” About the Erwin Center | Frank Erwin Center. N.p., n.d. Web. 19 Feb. 2017)
Let’s consider how much a new basketball arena would cost. An NBA arena is not worth considering because there is already market saturation in Texas. It is more likely the NBA would look to Seattle or Las Vegas if it expands down the road. Thus, we will look at the NCAA ranks. Consider the KFC Yum Center. The governor of Kentucky worked with the city of Louisville to create a modern and exciting new facility that would host the Louisville Cardinals as well as bringing in concerts. “The Arena Authority guided the development, financing and construction process of the $238 million arena” (Center, KFC Yum! “About Us.” KFC Yum! Center. N.p., n.d. Web. 19 Feb. 2017.) An NFL stadium is also not worth considering because it is highly unlikely Jerry Jones would let a 3rd team into his state. The current Texas Longhorn football stadium was expanded in 2009. It is a modern stadium that holds over 100 thousand people and is not lacking for any infrastructure. It is my recommendation that Austin keeps its current football stadium status quo for at least the next two decades.
The University of Texas is actually currently dealing with this situation. The Athletic Department wants to create a new arena. The current Frank Erwin center is being considered as being rezoned into the medical district. “Months after calling for the city to help fund the next Texas Longhorns basketball facility, it looks like athletic director Steve Patterson could actually get his wish — new Austin mayor Steve Adler told the Austin American-Statesman that he’s open-minded about the process. “A large entertainment venue would bring a lot of benefits to the city, but how it would be done remains to be seen,” he said. “I’m not opposed to anything. I’d keep everything on the table. It should be part of larger conversations.” Indeed, there’s not currently another indoor venue in Austin that can host major musical acts seeking to fill the nearly 18,000 seats the Erwin Center can accommodate for shows. Since the decisions to retain or fire the coaches in the three biggest men’s sports essentially made themselves to this point for Patterson, the construction of the Dell Medical School and the ripple effects on several important sports venues constitute the greatest challenges so far to the new head man of the highest revenue-producing athletic department in the nation. With one of the major questions involving whether or not the city of Austin will provide funding for the enterprise. Patterson believes the city has reason to invest in a new facility. “The reality is that Austin has had a free arena for 3 1/2 decades at no investment whatsoever,” Patterson said last fall in an event hosted by Texas Monthly. “You look at the growth projections five years out, to be a top 25 market in this country and not to have an invested a nickel in an arena is a heck of a position for the city of Austin to be in. “So perhaps we ought to be looking at all the constituent groups and how they contribute or invest in a facility going forward,” Patterson added. As ever, it’s Patterson heartily advocating for what he believes are the university’s best interests, just as he has done in what many consider to be rather tone-deaf ways when addressing the issue of paying athletes. One of the reasons why Patterson wants city funding? The new venue will likely be extremely expensive to construct, with a price tag as high as $500 million, according to the athletic department head man, though he could be overestimating the cost to help secure funding.” (Eberts, Wescott. “Texas Could Still Partner with City of Austin on New Basketball Venue.” Burnt Orange Nation. Burnt Orange Nation, 16 Feb. 2015. Web. 19 Feb. 2017.)
The money to build this new venue will come from three sources. The first will be from private donations and specifically the big hitters. Texas booster Red McCombs has donated over $100 million to to UT. (Olson, Max. “Red McCombs Bashes Texas Hire.” ESPN. ESPN Internet Ventures, 08 Jan. 2014. Web. 19 Feb. 2017.) Similarly, Joe Jamail has donated 30 million dollars. (Fish, Mike. “Most Powerful Boosters.” ESPN. ESPN Internet Ventures, 12 Jan. 2006. Web. 19 Feb. 2017.) The facility doesn’t have to be a 500-million-dollar Jerry world type palace. Emulating the Louisville KFC Yum Center success story would be prudent considering the construction cost. The money is out there. If all of these big hitters like Joe Jamail write big checks that brings the construction cost down. The second source of funding would be a naming rights deal. Consider, the Yum Center. The arena was named after KFC/Yum Brands for 10 years 13.5 million dollars. (“Yum! Lands Arena Naming Rights for $13.5 Million.” Home – WDRB 41 Louisville News. N.p., n.d. Web. 19 Feb. 2017) Texas Athletics and the Longhorns are a brand. They even have their own Longhorn network on ESPN. The basketball team isn’t as beloved as the football team. However, I think the potential might be there to get a little more in a naming rights deal given the brand name. Granted they won’t get the sweet deal Jerry Jones got where he charges AT&T 19 million per year but it’s worth conducting a state wide, regional, national, and even international naming rights search for a company that would pluck down the big bucks for it’s name on the arena.
One argument is job creation. Another argument would be revitalization and economic uptick in the surrounding area. Economist Andrew Zimbalst makes a compelling case that the cost outweighs benefit. Sports facilities attract neither tourists nor new industry. “Probably the most successful export facility is Oriole Park, where about a third of the crowd at every game comes from outside the Baltimore area. (Baltimore’s baseball exports are enhanced because it is 40 miles from the nation’s capital, which has no major league baseball team.) Even so, the net gain to Baltimore’s economy in terms of new jobs and incremental tax revenues is only about $3 million a year—not much of a return on a $200 million investment.”
(Zimbalst. Sports Jobs and Taxes Are Stadiums worth the Cost. Brookings, n.d. Web). It’s safe to say the city of Austin will see some positive uptick but it won’t see 300 million dollars of economic activity in sports bars etc. That’s a lot of fire ball shots to expect people to buy! If a pro team were to come? One obvious benefit would be civic pride right off the bat.
Austin taxpayers should not bear the majority of the fiscal cost of building a new basketball arena. Rather, people like Red McCombs and naming rights deals should be utilized to chop the cost down before going to the tax payers for money. It would be prudent to have a specific vision in mind like emulating the KFC Yum Center or perhaps the Fed Ex Forum in Memphis which is a nice modern arena that hosts both an NBA team and the Memphis Tigers.