Major League Sports Teams Want CRE Ventures To Boost Non-Game Day Revenue
Some of the most popular sports franchises in the U.S. are trying on the hat of real estate developer to knock revenues out of the park. But, to be a success, they find teamwork in development is key.
Delaware North Cos. owns and operates Boston’s TD Garden, the arena home to both the NHL’s Boston Bruins and the NBA’s Boston Celtics. To expand offseason vitality in the area around the arena — and to boost revenue — the company is partnering with Boston Properties on the 1.5M SF Hub on Causeway, a mixed-use development adjacent to the Garden and above the city’s North Station.
“We needed a partner that really understood the clientele,” Delaware North Vice President of Development Christopher Maher said Wednesday during a panel at the Urban Land Institute Fall Meeting in Boston. “You can’t have an office tenant complaining every night we have a Bruins game.”
While the project went through earlier proposed iterations focusing more on office, the one currently under construction includes a 38-story residential tower, a 272-room CitizenM hotel and a 627K SF office tower where Verizon has committed to a 440K SF lease. The project gives Delaware North a new front door to the Garden, and Boston Properties gets to utilize the arena as a selling point to potential tenants.
“We’re fond of saying TAMI brought us to Delaware North and told us to do this site,” Boston Properties Boston Region Executive Vice President Bryan Koop said.
Following the financial collapse of 2008, Koop said his company made a concerted effort to diversify its client roster, which was then roughly 80% finance-oriented. Boston Properties, in its pursuit of more technology and marketing firms, consulted with Google to see what it looked for in office space. Google was particularly fond of its Meatpacking District office in Manhattan, and Koop said Boston Properties religiously studied that area before trying to replicate the experience in Boston.
That led him to TD Garden.
While most tech tenant activity in Boston is focused on the city’s Seaport neighborhood and across the river in Cambridge, Boston Properties found 65% of all Greater Boston rail stops require passing through North Station. Koop leveraged that, along with the pitch that “the kids who code” live mainly on North Station transit lines, to land companies like Verizon and its Oath subsidiary as well as software company Rapid7.
The partnership works well for Maher, who said Rapid7 executives have already reached out about utilizing the Garden for companywide events. Delaware North is also bringing its Celtics and Bruins pro shop to the street level in the new development, and Maher expects to see a 30% increase in non-game day sales compared to the store's original location on the second level of the Garden.
The tech interest at Hub on Causeway is also driving Delaware North’s Patina Restaurant Group division to add a sports bar and food hall to cater to interest surrounding the stadium that might be for more than just the Bruins and the Celtics.
“We see that as being a real communal place for people to gather,” Maher said. “What’s happening on the ice or court may not be the most important thing.”
Developers across the country are looking to tap into the idea that neighborhoods can grow around a major league sports arena, from the Titletown District surrounding the Green Bay Packers’ Lambeau Field to Mission Rock, a 28-acre, mixed-use development partnership between the San Francisco Giants and Tishman Speyer.
Patient Zero of this trend is not a stadium, but a once rundown city park.
Bryant Park was one of New York City’s most dangerous parks during the 1970s and 1980s, but Biederman Redevelopment Ventures President Dan Biederman founded Bryant Park Corp., which was devoted to turning it around. Now, the Midtown Manhattan park is a magnet for tourists, and some of the city's most valuable office properties abut it.
“We were asked, ‘can you bring Bryant Park elsewhere?’” Biederman said. “All of a sudden, we became consultant for a few major league sports teams.”
Biederman Redevelopment Ventures has worked with the Packers, Giants and the New York Jets on placemaking projects surrounding their respective stadiums, and the company’s founder said those projects have stemmed from his work on Bryant Park.
Titletown in Wisconsin stands out to him, as it features a luxury hotel, a brewery, a health clinic and other amenities that are a far cry from what goes on inside nearby Lambeau Field.
“It made the project a little more Bryant Park than Green Bay Packer, but they love it,” he said.
The Colorado Rockies want to be more tethered to their nearby development. The Major League Baseball team is developing the 860K SF West Lot mixed-use project on a vacant lot outside Coors Field in Denver. The development, currently under construction, will include 225K SF of office, 75K SF of retail, a 175-room Rockies-branded hotel, a Hall of Fame for the team and 110 condos.
The Laramie Co. President Mary Beth Jenkins is the head of retail leasing for the Stantec-designed project and said the development is made possible by studies that showed a surprising amount of traffic will come from outside game days thanks to increased office development in the LoDo neighborhood surrounding Coors Field. Recognizing retail around sports stadiums was once limited to food and beverage venues, Jenkins said the evolving nature of who is frequenting the stadium makes mixed-use developments pencil out.
“The Rockies are doing this on their own, and I give them a lot of credit,” Jenkins said. “I don’t know how many teams or owners would have done this 10 or 15 years ago."