Analysis of the Economic Impact of

Analysis of the Economic Impact of Turner Field and SunTrust Park Sport Finance and Economics February 9, 2016

Economic Impact Analysis of Turner Field and SunTrust Park 2 History Turner Field is the home of the Atlanta Braves and is named after former Braves owner Ted Turner. Originally known as Centennial Olympic Stadium, the venue was constructed for track-and-field events for the 1996 Olympic Games and was subsequently remodeled by architect George T. Heery to become a baseball park in time for the 1997 major league season (Starrs 2006). The transformation from Olympic venue to baseball stadium took seven months, as almost 35,000 seats were removed in the process leaving seating for the Braves at just under 50,000 fans (Mock 2013). Atlanta-Fulton County Stadium, just across the street, was where the Braves had played since 1966 (Mock 2013). It became obsolete so, four months after Turner Field was finished it was demolished and the area became a parking lot for Turner Field. Turner Field was built at a cost of $232 million (SBRnet 2015). The $232 million venue was funded with money raised for the Olympic Games. That budget included money to renovate the stadium after the Olympics for the Braves and the demolition of Atlanta-Fulton County Stadium (SBRnet 2015). As an added bonus for the Braves, the ballpark didn t cost the team a dime since it was a gift from the Atlanta Committee for the Olympic Games (Knight 2006). Turner Field is owned by the city of Atlanta and Fulton County, and the Braves have a forty-year lease at $1 million per year until 2016, and $1.5 million thereafter to use the stadium (Starrs 2006). In 2015, Turner Field's average attendance for Braves games was 24,709 per game and the total attendance was 2,001,392 for the season (Baseball 2015). With regard to attendance, the team's first year was its best, with average attendance at 42,771 per game and 3.46 million for the season (Starrs 2006). Although Turner Field is best known for baseball, it also hosts many non-baseball events each year, including music concerts, weddings, receptions, holiday parties, product launches, and student proms (Starrs 2006). The stadium s parking lot has hosted vehicle ride-and-drive events, road races, and a circus (Starrs 2006). Despite its relatively young age, Braves executive Mike Plant said Turner Field needs $150 million in routine improvements and that it would cost $200 million to truly enhance the fan experience (ESPN 2013). On November 11, 2013, the Atlanta Braves announced that they would leave Turner Field for a new 42,000-seat, $672 million stadium (SunTrust Park) about 10 miles from downtown Atlanta in 2017 (ESPN 2013). Details of the 25-year sponsorship with SunTrust were not released, but Braves chairman Terry McGuirk said naming rights already were factored into the projected $672 million cost of the stadium (ESPN 2014). The cost of steel, concrete, labor, plumbing, electrical and most of the other items that go into building SunTrust Park will cost $462 million the price of hard construction costs negotiated between the Atlanta Braves and its construction manager, American Builders 2017 (Klepal May 2015). In total, the stadium construction of SunTrust Park will cost $672 million. Cobb County will pay $382 million (Includes $14 million in county Special Purpose Local Option Sales Tax revenue for transportation projects), the Braves will pay $280 million (the Braves will also pay $6.1 million a year in rent, which Cobb will use for a portion of debt service) and Cumberland Community Improvement District will pay $10 million (Klepal June 2015).

Economic Impact Analysis of Turner Field and SunTrust Park 3 Estimated Economic Impact The Atlanta Braves have an annual economic impact of more than $100 million paying $8.6 million in state and local taxes each year (Saporta 2013). Through Turner Field the Braves generate the employment of 1,648 full-time (or full-time equivalent) jobs in the local economy (Saporta 2013). Visiting Braves fans stay 110,000 nights each year in local hotels and motels (averaging about 2.5 nights per out-of-town fan) (Saporta 2013). Braves executive Mike Plant said the Braves benefit from having a fan base that extends well beyond Georgia s borders (Saporta 2013). Also, there is the estimated economic impact of SunTrust Park. Beginning with the construction process, which will support more than 5,200 jobs and generate $235 million in earnings, the new ballpark will be a dynamic economic engine for Metro Atlanta (Braves.com). Essentially, the Braves generate revenue from a large southern regional fan base which generates local economic benefit (jobs, hospitality industry, restaurant industry, etc.) for the city and downtown area of Atlanta. These benefits will now transfer to Cobb County which will exponentially boost the local economy of Cobb County. Mechanisms of Economic Impact The definition of economic impact is the net economic change in a community that results from imported spending attributed to a facility or event (Crompton 2008). Howard and Crompton (2008) discuss four ways in which a local economy is improved from the building of sport facilities. First, building a facility creates construction jobs (Crompton 2008). Second, people who attend games or work for the team generate new spending in the community, expanding local employment (Crompton 2008). Third, a team attracts tourists and companies to the host city, further increasing local spending and jobs (Crompton 2008). Finally, all this new spending has a multiplier effect as increased local income causes still more new spending and job creation (Crompton 2008). Turner Field has a direct effect on the local economy as the Braves employ 1,648 people. The local residents who are employed by the Braves pay taxes to their city councils which uses a proportion of these taxes to subsidize Turner Field. Turner Field and the Atlanta Braves attract nonresident visitors who spend money in the local economy both inside Turner Field and in the city of Atlanta. The new money from outside Turner Field creates income and jobs for the residents of Atlanta. Also, the Braves help bolster the local economy as the Braves spend $10.5 million on Atlanta-based companies (Saporta 2013). This money coexists with the cycle of economic development from community residents and tourists. Attraction of tourists is an important aspect of a sport facility. At Turner Field, a total of 32.3% of all seats sold per game are sold to fans who are from outside the state -- 7.4 percent coming from Alabama; 5.6 percent from Tennessee; 4.4 percent from South Carolina; 4 percent from North Carolina and 3.1 percent from Florida (Sport 2013). In all, about 300,000 out-of-state visitors attend Braves games each year, contributing about $100 million to the team s revenues (Saporta 2013). Also, visiting baseball teams spend about $2 million in Georgia when they play the Braves each year (Saporta 2013). These types of numbers are huge not only to the local

Economic Impact Analysis of Turner Field and SunTrust Park 4 economy but, to the state economy too. The inflow of revenues from tourists are vital in the formation of new jobs and more household income. SunTrust Park will have a major economic impact on Cobb County through a variety of mechanisms. Annual earnings for the more than 3,000 employees needed to staff the Braves organization will total $35.8 million (Braves.com). More than 1,600 of those jobs will be in Cobb County (Braves.com). Visiting spending, resulting in 873 jobs, will provide $25 million in earnings, of which $8.9 million will be earned in the county (Braves.com). SunTrust Park will generate a total annual property tax revenue of more than $6.0 million and more than $3.0 million each year will be generated for the Cobb County public school system (Cushman 2014). The Cumberland Community Improvement District, formed in 1988 to help fund necessary infrastructure improvements through a special tax on commercial property owners, expects to generate more than $800,000 annually in revenues that will be used to maintain and improve the area around the Braves project (Cushman 2014). The proposed Cumberland Special District II assessment zone will generate an additional $480,000 each year to help pay for Cobb County s share of total project costs (Cushman 2014). Critical Analysis of Economic Impact Braves Exec VP/Business Operations Mike Plant said the team commissioned an economic impact study in 2013, ahead of their Turner Field lease negotiations with the city of Atlanta, because they "wanted to show what we do to drive the economy in our region (Saporta 2013). The study found that the Braves have an "annual economic impact of more than" $100M, and that the team pays $8.6M in "state and local taxes each year (Saporta 2013)." The economic impact study was conducted by Bruce Seaman, an economist with Georgia State University s Andrew Young School of Policy Studies and from research derived by Brailsford & Dunlavey Inc. program management firm (Saporta 2013). I believe these numbers associated with the economic report conducted by Bruce Seaman to be credible but, I do not believe the economic impact analysis as a whole is credible. Howard and Crompton (2008) state five principles that are inviolable to the integrity of economic impact analyses: (1) exclusion of local residents, (2) exclusion of time-switchers and casuals, (3) use of income rather than sales output measures of economic impact, (4) use of multiplier coefficients rather than multipliers, and (5) careful interpretation of employment measures. The economic impact analysis conducted by Seaman breaks the first rule of exclusion of local residents. In his economic impact analysis, he includes that the Braves spend $10.5 million on Atlanta-based companies (Saporta 2013). As stated in Howard and Crompton (2008), expenditures by those who reside in the community do not contribute to an event s economic impact because these expenditures represent a recycling of money that already existed there. The purpose of this economic impact analysis was to produce a high economic impact number for Turner Field and the Atlanta Braves due to the Turner Field lease negotiations in 2013. There is one huge potential source of bias in the reporting which is Bruce Seaman, who conducted the economic impact study, is an economist with Georgia State University s Andrew

Economic Impact Analysis of Turner Field and SunTrust Park 5 Young School of Policy Studies. Georgia State University is located in Atlanta, Georgia where Turner Field and the Atlanta Braves are located. Recently, Georgia State University proposed repurposing Turner Field into a 30,000-seat football stadium and building another baseball stadium that will include Hank Aaron s wall as part of the structure (Roberson 2014). There is plenty of potential for bias reporting of an inflated economic impact analysis for the Atlanta Braves as it would benefit both Georgia State and the Atlanta Braves by rewarding each with a new stadium. The economic impact analysis of SunTrust Park consists of credible numbers supported by an economic impact summary located on Braves.com. The economic impact analysis was conducted by Brailsford & Dunleavy Inc. The economic impact summary provides a summary of the economic and fiscal benefits of a MLB team and new ballpark to Cobb County. It includes economic impact areas such as construction benefits, ongoing park benefits, ongoing visitor spending benefits, ancillary development benefits, operating benefits, and sums it all up with total ballpark and development benefits (Brailsford). It complies with the five principles that are inviolable to the integrity of economic impact analysis which supports the fact that the numbers are valid estimates. Also, I did not identify any potential sources of bias in the report. Conclusion Turner Field has been home to the Atlanta Braves for the past 20 years and has helped boost the local economy of Atlanta, Georgia. It was a can t lose situation for the Braves in 1996 as the stadium was built for the Olympic games and then reconstructed into Turner Field. Turner Field has had a direct effect on the local economy of Atlanta through employment, job creation, visitor spending, taxes, tourism and much more. As of 2017, Turner Field will no longer be the home of the Atlanta Braves but, SunTrust Park and Cobb County will absorb all the economic impacts that comes along with the Atlanta Braves. While the economic impact analysis of Turner Field was likely inflated due to bias to produce a high economic impact number for Turner Field and the Atlanta Braves due to the Turner Field lease negotiations in 2013, the economic impact analysis of SunTrust Park appeared to be credible. The economic benefits from the new ballpark will ripple throughout the region. The Braves new SunTrust Park has been positioned as a play, work, stay destination, promising more than 600 upscale residences, a 260-room hotel and office space and 400,000 square feet of restaurant and retail space (Ramer 2015). A $55 million mixed-use development, including up to 300 apartments and 10,000 square feet of retail space, was approved by Cobb planning officials recently, and a 28-home single-family subdivision received the greenlight in early July (Ramer 2015). There is potential for an enhanced experience for Braves fans paired with an improved quality of life for residents of the surrounding communities. Residents will have closer access to the Braves and a greater array of amenities and job opportunities just minutes from their doors. The stadium is only one part of a bigger picture that may ultimately make the area even more appealing to home buyers (Ramer 2015). SunTrust Park will establish a virtuous cycle of economic development in Cobb County which will lead to growth and expansion of the local economy for the next 25+ years.

Economic Impact Analysis of Turner Field and SunTrust Park 6 Citations Atlanta Braves Logo [Digital image]. (n.d.). Retrieved February 8, 2016, from https://upload.wikimedia.org/wikipedia/en/thumb/f/f2/atlanta_braves.svg/1280px- Atlanta_Braves.svg.png Baseball Reference. (2015). Atlanta Braves Attendance, Stadiums, and Park Factors Baseball- Reference.com. Retrieved February 09, 2016, from http://www.baseballreference.com/teams/atl/attend.shtml Brailsford & Dunleavy Inc. (n.d.). Summary of the Economic and Fiscal Benefits of a MLB Team and New Ballpark to Cobb County. Retrieved February 9, 2016, from http://atlanta.braves.mlb.com/atl/downloads/suntrust-park/economic-impact.pdf Braves.com. (n.d.). Economic Impact. Retrieved February 09, 2016, from http://atlanta.braves.mlb.com/atl/ballpark/suntrust-park/overview/economic-impact/ Crompton, J., & Howard, D. (2008). The Principles of Economic Impact Analysis. In Financing Sport (pp. 103 159). FiT Publishing. Cushman & Wakefield. (2014, March). Impact Analysis: The Atlanta Braves new Stadium Project. Retrieved February 9, 2016, from http://www.cushmanwakefield.com/~/media/reports/unitedstates/braves Development Overview 3-14.pdf ESPN.com news services. (2013, November 11). Braves: Moving to Cobb County in '17. Retrieved February 09, 2016, from http://espn.go.com/mlb/story/_/id/9959440/atlanta-bravesleaving-turner-field-relocating-cobb-county-2017 ESPN.com news services. (2014, September 17). Retrieved February 09, 2016, from http://espn.go.com/mlb/story/_/id/11537914/atlanta-braves-new-stadium-named-suntrust-park Klepal, D. (2015, May 26). New Braves stadium 'bricks and sticks' to cost $462 million. Retrieved February 09, 2016, from http://www.ajc.com/news/news/local/suntrust-park-bricksand-sticks-cost-462-million/nmn5j/ Klepal, D. (2015, June 28). SunTrust Park may cost homeowners less. Retrieved February 09, 2016, from http://www.myajc.com/news/news/local-govt-politics/suntrust-park-may-costhomeowners-less/nmmqj/ Knight, G. (2006, September 29). Turner Field. Retrieved February 08, 2016, from http://www.baseballpilgrimages.com/national/atlanta.html Mock, J. (2013, June 18). Centennial Olympic Stadium transformed into Turner Field. Retrieved February 08, 2016, from http://www.usatoday.com/story/sports/mlb/braves/2013/06/18/turnerfield-home-of-braves/2434859/

Economic Impact Analysis of Turner Field and SunTrust Park 7 Munsey & Suppes. (2006, April). Turner Field. Retrieved February 08, 2016, from http://www.ballparks.com/baseball/national/turner.htm Ramer, E. L. (2015, November 24). The New Braves Stadium... A "Field of Dreams"? Patch. Retrieved February 09, 2016, from http://patch.com/georgia/sandysprings/new-braves-stadiumfield-dreams Roberson, D. (2014, May 7). Georgia State wants to turn Turner Field into football stadium. Retrieved February 09, 2016, from http://www.ajc.com/news/sports/college/georgia-state-wantsto-turn-turner-field-into-foot/nfq8r/ SBRnet. (2015, March 01). Atlanta Braves. Retrieved February 09, 2016, from http://www.sbrnet.com.prox.lib.ncsu.edu/article-detail.aspx?id=232065 Saporta, M., & Wenk, A. (2013, August 2). Study: Braves a $100M home run for economy - Atlanta Business Chronicle. Retrieved February 09, 2016, from http://www.bizjournals.com/atlanta/print-edition/2013/08/02/study-braves-a-100m-home-runfor.html Sport Business Daily. (2013, August 6). Braves Commission Economic Impact Study Ahead Of Turner Field Lease Negotiations. Retrieved February 09, 2016, from http://www.sportsbusinessdaily.com/daily/issues/2013/08/06/franchises/braves-study.aspx Starrs, C., & New Georgia Encyclopedia. (2006, August 25). Turner Field. Retrieved February 08, 2016, from http://www.georgiaencyclopedia.org/articles/sports-outdoor-recreation/turnerfield Edited by NGE Staff on May 9, 2013 SunTrust Park Logo [Digital image]. (n.d.). Retrieved February 8, 2016, from http://atlanta.braves.mlb.com/atl/ballpark/suntrust-park/images/suntrust-park-logo.jpg Turner Field Logo [Digital image]. (n.d.). Retrieved February 8, 2016, from http://content.sportslogos.net/logos/54/51/full/528.png