Arena or no Arena? That is the Question

The arena issue is a controversial one that I see has attracted many opposing views. WeRDevos wrote: "Towns build arenas to either attract a new franchise, or to keep an attractive franchise". My problem is with the latter part of the comment. The question is why attracting a new franchise (probably an expansion one) is better than keeping an established one if there is any possibility of losing it? That is still an optimistically framed question based on the assumption that getting a new franchise is an easily achievable objective.

The local business community in Orlando began the pursuit of a NBA expansion franchise in 1986 and was granted the franchise in 1987. The Orlando Arena (or better known as Orena) was then constructed by the City of Orlando at a cost of $102 million of which $98 million was provided by the city. It took almost 3 years and many great efforts by community leaders to bring this franchise to operation in January of 1989. The Arena is old comparing to many modern arenas built, and needs to be either renovated or replaced. It is obvious that at some point of time the issue of keeping the Magic in town comes down to resolving the arena matter. The problem is that the current ownership is not helping their case by winning on the basketball court.

There are many positive arguments on the economic impacts of a pro-sport franchise in terms of creating new businesses and job opportunities, as well as new tax revenues to a metro community. However, most independent studies have shown such impacts are overemphasized. These studies, however, admit that there are unquantifiable variables on a pro-sport franchise that could not be measured thoroughly. One element that has been mentioned is the "Quality of Life" factor. An extensive study by two prominent economists suggests that the quality of life improvement may make such public contributions not such a bad idea.

For more see: http://www.kc.frb.org/publicat/econrev/PDF/1q01rapp.pdf#search=

I acknowledge Matt's narrative in outlining the different approaches to building a new arena. I recalled that I had recently read about UCF's attempt to build an arena all through private funding, and then remembered if was in one of Whit Watson's writings on his blog. In short, UCF funds the construction by collecting money on 2,000 dorm rooms, two parking garages and 89,000 square feet of space for retailers. If "dorms" are replaced by "condos" & retail, dining, and other attractions are inserted in the project, UCF's model looks like a starter for a new Orena in downtown Orlando.

For more see:
http://whitwatson.sunsportstv.com/2005/11/under-construction-forever.html

In any event, too much time and effort has been put in bringing about the Orlando Magic to let it go without trying. It is up to the business community leaders with the help of elected city and county officials to see to it that the Magic is not lost. I underscore the importance of leadership. We cannot allow the moguls of hotels' industry dictate the trend of development only in the direction of constructing more convention facilities to serve their immediate interests.