Nats Park Has Revitalized Southwest Washington D.C.
The site of tonight’s All-Star game, Nationals Park, has been an “engine of economic growth” for Southwest Washington, D.C.; the fastest growing area of the District. Michael Stevens, President of the Capital Riverfront business improvement district, said the development of the stadium “helped people understand that a place they knew as unsafe was now a safe neighborhood.” Since the stadium went up in 2008, the number of families living around the park has quadrupled (to 3809), household income has risen 127% (to $78,265) and value of real estate in the neighborhood has increased 130% (to $2.65 billion); as new residential towers, a waterfront boardwalk and dozens of restaurants have replaced low-income housing projects, fenced off gravel pits and empty lots. The ballpark is also now generating so much stadium related tax revenue, that the city made an additional $17 million payment on the building’s construction loan in 2017; as D.C. CFO Jeffrey Dewitt pointed out, “that’s a third of a new middle school right there.”
Howie Long-Short: As cities come to the realization that using public funding to build stadiums in isolated locations, surrounded by parking lots, is a losing proposition (and started tightening purse strings); team owners have begun building downtown. They’ve surrounded their new venues with mixed-use real-estate projects (like in D.C.) capable of servicing the public debt. Retail, office and high-end residential properties now surround urban venues in at least 10 cities, stimulating the local economy and rejuvenating downtrodden parts of cities, as no stand-alone facility ever did. The trend mirrors a greater American urban renaissance (started in ’10), where for the first time in 60 years more people are moving to the city than the suburbs, driving the country’s economic growth.
It’s not just Southwest D.C. that has benefited from the construction of Nationals Park, though. The District has added 130,000 new residents over the last 15 years and now claims a population exceeding 700,000 for the first time since the 1970s. The rise in population has actually managed to create concerns surrounding traffic, parking and an under-funded Metro (closes at 11:30p); unfathomable just a decade ago.
Dennis Coates, an economist at UMBC, doesn’t buy into the notion that Nationals Park has positively impacted the area’s economy. Coates said, “it is very common for people to say, ‘just stand here and look at all the cranes,’ and attribute that to the stadium” but, “it is one big shell game. This is not income growth; it’s redistribution. It’s money that was being spent in Northern Virginia or Georgetown, and now it’s being spent near the ballpark.”
The substitution effect (as Dennis explained) is in play here, though certainly not at levels we see in other cities. 45% of fans attending Nationals games are from Virginia, another 35% are from Maryland and 65% of those moving into the neighborhood of the stadium are from outside the District (i.e. substitution effect not applicable). Of course, rising property values and an expansion of the city’s tax base are also undeniably positive developments for the city that can be tied directly to the construction of the venue.
Fan Marino: Nationals star Bryce Harper won Home Run Derby on Monday night, defeating Kyle Schwarber in the final round (19-18). Harper hit 44 home runs in all, the longest sailing 473 feet. With the win, Harper becomes the first player to win Home Run Derby in their home park since Todd Frazier (Cincinnati) did it in ’15.
Fun Fact: The Nationals return to Washington came 33 years after the Senators abandoned the District for Texas (became Rangers) in 1971. That team replaced the original Senators franchise that left D.C. for the Twin Cities (became Twins) in 1960.
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