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Houston Stronger: City's Sports Franchises To Reinvest In Real Estate After Banner 2017

It is not often the back office leaders of the Houston Astros, Texans, Rockets and Dynamo are all in the same room. After a year to remember, Houston's sports organizations want to keep the momentum going by reinvesting in their venues.

Houston Texans President Jamey Rootes, Houston Dynamo President Chris Canetti, Winstead PC Shareholder David Staas, Houston Astro's President Reid Ryan, Houston Rockets CEO Tad Brown
Houston Texans President Jamey Rootes, Houston Dynamo President Chris Canetti, Winstead P.C. Shareholder David Staas, Houston Astro's President Reid Ryan, Houston Rockets CEO Tad Brown

"Your venue is like your factory, it's where we produce our product," Houston Texans President Jamey Rootes said. 

Houston's sports venues are competing on two different levels, Rootes said. On one hand, they are competing against each other. On the other hand, they are competing against the rest of their own respective leagues. Combined, the pressure to keep a venue competitive can be intense. Rootes is constantly attending other venues in and out of Houston, taking hundreds of pictures along the way. 

The current state of stadium development has intensified the pressure. Costs around the country have been soaring. The Los Angeles Rams are spending $2.6B on their new stadium. The Las Vegas Raiders are close behind at $2.4B. 

Rockets CEO Tad Brown attended the recent SEC Championship game between Georgia and Auburn at the new Mercedes-Benz stadium in Atlanta, price tag $1.6B. 

"That stadium has taken all of the best things of other stadiums and applied it. You look around and say, 'why didn't I think of that?'" Brown said. 

Houston Texans President Jamey Rootes and Houston Dynamo President Chris Canetti
Houston Texans President Jamey Rootes and Houston Dynamo President Chris Canetti

New stadium development is not in the cards for Houston. With each team playing in a relatively new stadium, each organization is having to figure out how to keep up with the curve within existing facilities. But with the escalating cost of stadium development, that may work out in Houston's favor. 

"NRG cost roughly $450M. You look at the last couple NFL stadiums, costs have escalated dramatically, you're well-served to take care of what you have," Rootes said. 

Keeping older facilities up-to-date has been hit and miss in the NFL. The Kansas City Chiefs' Arrowhead stadium is almost 50 years old. In today's dollars, the stadium initially cost $246M. Arrowhead got a one-time $375M renovation in 2010. 

"That's still one of the best stadiums in the NFL," Rootes said. 

On the other hand is the Buffalo Bills' New Era Field, which is consistently rated as one of the worst stadiums in the NFL. At a Bills game, you are more likely to enjoy the parking lot, home to some of the best tailgating in the league. Rootes thinks no amount of money can make New Era Field competitive again. 

"The lesson is to never get behind because you can never play catch-up. You have to proactively invest," Rootes said. 

Houston's sports teams are busy doing just that. 

Minute Maid Park

"Inside the four walls of Minute Maid, we will continue to invest a lot of money," Astros President Reid Ryan said. 

The Astros recently finished a complete remodel of a section of the ballpark. The improvements are aimed at attracting the next generation of baseball fans, a goal likely to get a boost by winning the World Series.  

"We found millennials don't necessarily want a seat, they want a place for craft beer, better food and somewhere to plug their phones in," Ryan said. 

The new center field renovation includes a Torchy's Tacos, Shake Shack and Uber drop-off point. Other new additions include the Lexus Field Club, the Budweiser Brew House and a street art display in Home Run Alley. 

Changes to the ballpark are not just physical. Leaning into the fact millennials do not always value better seats, the Astros launched the Ballpark Pass which, for a lower price, guarantees access to all 10 Monday through Thursday games during a particular month, but not a particular seat. The pass is seamlessly integrated with mobile devices. 

"It's a brand-new way of thinking," Ryan said.

Houston Stronger: City's Sports Franchises To Reinvest In Real Estate After Banner 2017

Basketball and soccer are a step ahead of the curve in terms of a younger audience. 

"We're geared towards a younger demographic. Probably about five or six years ago we realized our fans are consuming things differently, so we changed almost everything," Brown said. 

Over the past decade, the average viewer of ESPN's professional basketball broadcasting has not budged at all — it has been 37 years old since at least 2004. The average football viewer, however, has climbed from 43 years old to 47. For baseball it has been even worse — it has gone from 46 years old to 53. The MLS has the youngest average fans. 

"A soccer match is two hours long every time, that's unique to our sport," Houston Dynamo President Chris Canetti said. "To a younger audience, that plays to our advantage." 

The Dynamo play in Houston's newest stadium. BBVA Compass has been a game-changer for EaDo, transforming the overlooked area into one of Houston's hottest neighborhoods. 

"EaDo was a forgotten part of town, 59 was a mental block to development," Canetti said. "BBVA really opened up the area." 

With 5,000 jobs and 6,000 residents, the area is still ripe with opportunity. It is easy to convince people to come to EaDo these days; now the issue is parking.

Camden Property Trust CEO Ric Campo
Camden Property Trust CEO Ric Campo

With the recent success of Houston sports and Houston's rising prominence as a sporting venue, athletics have generated serious revenue for the city. 

"In the last 18 months of Houston sports, between the World Series, Final Four, Super Bowl, Rockets playoffs, rodeo and other sporting events, our local economy has generated $800M of sports-related spending," Camden CEO Ric Campo said. 

Rockets CEO Tad Brown, Camden Property Trust CEO Ric Campo, Houston Dynamo President Chris Canetti, Houston Astros President Reid Ryan
Rockets CEO Tad Brown, Camden Property Trust CEO Ric Campo, Houston Dynamo President Chris Canetti, Houston Astros President Reid Ryan

What is next for Houston's sports teams and their venues? Each back office leader laid out his wish list.

The Astros: "More square footage. Minute Maid is one of the smallest ballparks," Ryan said. 

The Texans: "We'd like to have end zone suites, similar to the NBA's courtside seats, but have no idea how'd we do that," Rootes said. 

The Dynamo: "A roof and air conditioning," Canetti said. 

The Rockets: "A championship ring ceremony," Brown said. 

Let us hope they all get what they want.