All Eyes Are On The Super Bowl. The Future Of The SoFi Stadium Complex Is The Real Game-Changer
As the Super Bowl prepares to touch down in Los Angeles this weekend, all eyes are on the host venue: the newly built, $5B SoFi Stadium in Inglewood.
Boosters who campaigned for the stadium to host the game estimate that it will generate hundreds of millions of dollars in spending in LA County, a figure that might fluctuate further now that the Los Angeles Rams will be part of the action.
While the true economic impact of the game remains to be seen, the Super Bowl is just an appetizer for the potential game-changer that is Hollywood Park, the nearly 300-acre mixed-use development rising up next to the NFL stadium, experts tell Bisnow.
The economic impact of the Super Bowl and events tied to the game were estimated to be between $234M and $477M in a study commissioned by the Super Bowl Host Committee, a group organized by a partner organization of the LA Tourism & Convention Board.
While the true impact might be closer to $50M, it's no doubt that "the Super Bowl does wonders for the tourism industry here,” Los Angeles City Tourism Department Executive Director Doane Liu said.
For the city’s hospitality industry, the event’s impact is already being felt and it isn’t negligible. The Super Bowl has translated into several hotels selling out, or close to it: The 889-room InterContinental and the 878-room J.W. Marriott are both booked solid for Super Bowl weekend, the Los Angeles Times reported.
Hospitality data and analytics company STR released projections that room rates would reach an average daily rate of $445 for Friday, Feb. 11, through Sunday, Feb. 13. That’s a notable jump over previous months: STR data shared with Bisnow shows that in November and December 2021, average daily rates were approximately $180 and $177, respectively, in the Los Angeles hotel market.
While the game is not entirely sold out, the remaining tickets are part of the 25% that the National Football League reserves each year as part of luxury packages that cost upward of $5,800, according to the LA Times.
Even those who can't afford to attend the Super Bowl are still likely to be drawn to the city over the event's weekend, Liu said.
“It’s not just about the 80,000 people who go to the game,” Liu told Bisnow, noting an estimate from the study that suggested as many as 150,000 people might come to town for Super Bowl-related reasons, including to attend side events or meet with clients.
Despite this short-term gain, economic growth — a result of an increase in the amount of money people have and can spend — doesn’t typically result from one-time events like Super Bowls or even the Olympics, David Swindell, director of the Center for Urban Innovation at Arizona State University’s School of Public Affairs, told Bisnow.
Cities are increasingly choosing not to heavily subsidize new sports venues with public funds. There is an established body of academic studies that indicate these major developments do not often bring enough economic benefit to justify the use of public money.
But some in the hospitality industry are already seeing the benefits of the stadium, which not only hosts football games but a roster of year-round music and entertainment events.
Aaron Schock, the developer and owner of the 401-room Hyatt Place/Hyatt House LAX/Century Blvd, said that while stadium proximity didn’t factor into his decision to buy and invest in the airport-adjacent property, that move has paid off.
Schock’s hotel, less than a 15-minute drive west from the football stadium, opened in late 2021, as the coronavirus pandemic was still significantly limiting the customers who usually fill airport hotels to the brim: international and business travelers.
In the midst of that steep decline in occupancy, “the SoFi Stadium has been a godsend,” Schock said.
In November, occupancy for LAX hotels was at about 50%, but in the days surrounding a K-Pop event at the venue, occupancy rose to 95%, he said, citing STR data. He saw a similar boost for the 49ers vs. Rams game in late January. There aren’t any similarly sized hotels in the area immediately surrounding the stadium — the current largest in a roughly 1-mile radius appears to be the 105-room Quality Inn & Suites Los Angeles Airport-LAX — so the airport’s hotels at least a 10-minute drive west are among the closest.
SoFi Stadium has “been essential to the success we’ve had so far,” Schock said.
Unlike many of LA's sports venues, SoFi Stadium was not built as a standalone structure in the middle of a giant parking lot. SoFi Stadium is the centerpiece of Hollywood Park, a massive mixed-use project underway that will introduce new residential, hotel, office and retail components.
That development surrounding the stadium is potentially where the real money lies, for both the economies of the cities that host the venue and the team owners, Swindell said.
Rams owner and Chairman Stan Kroenke privately financed the $5B NFL stadium, the priciest stadium built in the U.S. to date, and kicked off plans in 2016 to redevelop the former racetrack site with up to 5M SF of creative office space, as many as 2,500 residential units, 890K SF of retail and a 300-room hotel, though it will be years before the entire project is fully built out.
In 2016, when the project was barely getting underway, the then-development manager for Hollywood Park Land, Chris Meany, told the Los Angeles Daily News that the project would generate "tens of millions of dollars in annual tax revenue," an estimate he characterized as conservative. Meany said the money would come from ticket taxes, sales tax revenue, property tax and the taxes generated by the hotel in the project.
"That's going to yield lots of additional spending in that tight geographic area," Swindell said. "The stadium is the glue holding together that development, and the development most likely would not have happened but for the stadium, and that massive investment in the stadium."
There's been a surge in demand to live in Inglewood since the stadium came to town. Roughly two years after the stadium was announced in 2016, home values in the city of Inglewood rose at roughly double the rate of the rest of LA County, Curbed LA reported, while rents rose 12.2%. That was welcome news for homeowners and landlords in the city, but less well-received by renters and some neighborhood lifers who worried about longtime residents being pushed out and the effects of gentrification on the historically Black enclave.
Swindell compared the stadium-anchored project with mixed-use developments next to new stadiums built by the Atlanta Braves and by the Green Bay Packers, which increased the values of the teams.
Closer to LA, in Anaheim, the owners of the NHL's Anaheim Ducks and MLB's Angels are each planning massive developments around the Honda Center and Angel Stadium, respectively. The Honda Center project would redevelop about 115 acres around the city-owned arena, the Orange County Business Journal has reported, while the Angel Stadium project would transform 150 acres around that baseball stadium, though the project is still caught up in legal hurdles. Both developments are seen as potentially transformative for that city.
“This is what team ownership has become over the last 10 or 15 years,” Swindell said. “Team owners that want new stadiums, they're interested in the development they can capture around the facility. They use the facility as the tool to leverage all that additional development."
Experts who spoke to Bisnow were optimistic that the Hollywood Park development and all that it would bring could be an economic generator for the city of Inglewood because of the jobs and hotel taxes it could generate as well as the potential for it to become a destination that draws people to the city. They were even more certain that the development would make money for the team owner — in this case, Kroenke.
A multibillion-dollar investment such as Hollywood Park is not something that's undertaken without first calculating to maximize revenue for the team and for the team owner, said Michael Leeds, an economics professor at Temple University who studies sports economics.
"NFL owners know how to make a buck," Leeds said.