Is the economic impact worth the cost?

During a recent Denver City Council meeting, Ryan Fleming and other business advocates made a compelling case for investing $70 million to bring a new women’s professional soccer stadium to a dormant area in Baker. They argued that this project would breathe new life into the neighborhood and attract more customers.

Despite the enthusiasm from supporters like Fleming, research indicates that the economic benefits of building stadiums are often overestimated. A comprehensive analysis of over 130 studies published in the Journal of Economic Surveys in 2022 revealed that cities rarely recoup their costs when investing in sports facilities. Instead, the spending tends to shift within different parts of the city rather than generating new revenue.

Geoffrey Propheter, a professor at the University of Colorado Denver, emphasized that stadiums can become financial burdens on taxpayers. However, Denver Mayor Mike Johnston and many community members view the proposed stadium as a beacon of hope for a neglected lot in Baker.

The stadium would be constructed on a portion of the former Gates Rubber factory site, with the surrounding area poised for a transformation. While the city plans to contribute $70 million to the project, the team’s ownership group will oversee the stadium’s construction.

Johnston believes that the stadium project could be a game-changer for the area, which has long awaited revitalization. The economic study commissioned by the mayor’s administration projects a significant impact on the city’s economy over the next three decades.

Despite the optimism surrounding the project, critics like Propheter caution that the economic benefits may be overstated. Concerns have been raised about the city’s lack of a full cost-benefit analysis and the potential impact on the overall economy.

If the city council approves the investment, the team will move forward with soliciting public input and designing the site. Construction is expected to begin with the goal of opening the stadium in 2028.

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