There are a lot of moving parts when it comes to building a new sports facility—and a lot of potential landmines where things can go wrong. It’s not an endeavor for the meek or reckless, as there’s often reputations, jobs and millions of dollars on the line. That’s why having a well-researched plan with cooperation from all parties involved is so critical. It can mean the difference between hitting a grand slam or striking out. With that in mind, we talked with several experts about best practices for building a new facility.
Look Before You Leap
Industry experts agree that when planning for a new sports facility, one of the biggest mistakes CVBs, cities and counties make is rushing the process and getting ahead of themselves.
“What happens is a lot of CVBs want to jump at the big shiny object with no real data,” said Jon Schmieder, founder and CEO of Huddle Up Group, a sports tourism, venue and event consulting company. “We try to put the brakes on those conversations.”
When working on a potential new project, Schmieder said Huddle Up Group first tells the client to take a deep breath and really look at their particular market to see what makes sense. That typically involves doing a feasibility plan and facility audit.
“We evaluate the venue infrastructure in that community,” Schmieder said. “We look at what venues they have, and if they’re being utilized effectively. Do they have gaps?”
This initial process should also answer questions like who is going to market and sell the venue? Who’s going to operate and manage it? And, of course, is there funding in place to both build the facility and sustain it over the long-term?
Schmieder said Huddle Up Group recently went through this process with the town of Grand Chute in Wisconsin. “We provided the concept for what they needed,” said Schmieder. “They didn’t have any suitable indoor facilities for tourism and hosting tournaments. We told them you have to build something new, and you need a funding structure and a management team in place to run it. You’re trying to put all the puzzle pieces together.”
The end result of that process, which took about six years, is the Community First Champion Center, a 164,000-sq.-ft., $30 million, multi-purpose venue. The center opened in October 2019 and can accommodate a variety of sporting events, including basketball, volleyball, hockey and skating.
Like Schmieder, Jim Arnold, director of business development at SFI Companies, has had to tell CVBs to pump the brakes in the early planning stages of a new sports facility.
“We’ve told plenty of clients that a large-scale sports complex just doesn’t make sense for their market. It’s not worth paying for.”
Arnold said that when sizing up a new market, you have to study factors like what complexes already exist in the area, the population base, local hotel inventory, and if the area has an airport or is within a four- to six-hour drive from other markets they can draw from.
“If we see an opportunity, then we help create a business plan,” said Arnold. “The number one thing we get out of this process is rightsizing the complex for the community. You start to narrow down what the park looks like in terms of number of fields and amenities. At the end of every study we want the client to understand what it is, what it looks like, how it operates, and how much it will cost.”
Schmieder said that once the initial feasibility study has been completed, which typically takes between 60 to 90 days, it’s time to get down to the nuts and bolts of funding. Because no matter how good a business plan may be, it’s worthless if it can’t be executed.
“You make the case to whoever you need—usually elected officials—to further your initiative,” he said. “You have to give the politicians the ammo they need to move the project forward. And that’s an artform. That’s not easy. They have to be willing to put their political future on the line with their constituents.”
To make their jobs easier and build community support, Schmieder said elected official need to know project details like how much it’s going to cost, how they’re going to subsidize the venue year after year, and how much economic development it’s going to generate. Elected officials also have to help determine the best funding structure.
Hiccups often occur at this stage, said Arnold, especially with recent cost increases in construction materials and labor, which can often result in sticker shock. “It can be a project killer,” he said. “People start to get nervous. We’ve seen some pretty big misses on expected budget versus real budget. It’s a lot of money, and public officials will be on the hook for it.”
Arnold said another hazard is when a developer makes wild guarantees about a project’s economic impact without any real data to back it up. This can also turn the public against a project and put elected officials in a bad spot.
“Capital construction funding is one thing, but what about the capital improvements that will be needed along the way?” said Arnold. “We’re trying to set up clients for long-term success, not just the quick goal of getting something built in a few years.”
Arnold said this is where it’s critical to have good project partners that can help determine funding sources, whether that’s traditional bonds, a public/private partnership, or hotel, food and beverage taxes.
“We help communities figure out what funding mechanism makes the most sense for them. The benefit of these projects is through economic impact. So, it makes sense to find the funding mechanism that’s tied to the dollars people are spending when they come to the facility.”
This is also where SFI’s design-build approach helps move a project forward, said Arnold. “We’ve seen a lot of cases where a project gets designed, the client falls in love with it, but then the construction team comes in and the cost is $15 to $20 million more than they thought. We approach our parks as a design/build format with a guaranteed maximum price. If the funding mechanism can afford $30 million, we know our design and construction team can ensure there are no surprises on the backend.”
Selling The Vision
Once the financial piece has been finalized, it’s time to move into design and marketing, Schmieder said. “You need at least two years to get out in front of a project and start selling it, or else you’re going to open to an empty house,” he said. “You have to get the right sales team in place with the right resources and really go after it.”
Lori Moore is an account executive at SFA, who previously worked as general manager of Rocky Top Sports World in Tennessee. She typically gets involved with a project once funding has been acquired and the construction team is ready to break ground. Moore oversees functions like sales, management and operations and said it’s important to look at the big picture and understand how your project might be impacted by other facilities.
“You have to differentiate yourself,” she said. “When Rocky Top had its big success initially, lots of people in the same region wanted to replicate that. Doing something that’s already been done doesn’t benefit those communities equally. What it does is it divides the pie.”
She added that as you’re designing the facility, it’s important to focus on both the short-term and long-term needs of the community. “Understand what you can do to make it adaptable to future uses, which may not include sports. It may be focused on other uses and programs. It should create a sense of pride and ownership within the community, which springboards a whole new source of health and well-being in the community.”
Arnold also stressed the importance of having a multi-functional facility. “Top-notch turf fields are common. To differentiate yourself, you need to look at how to entertain the whole family when they’re onsite, with things like miniature golf, ropes courses and zip lines.”
Moore said it’s also critical to identify partners early in the development process, such as hotel and restaurant developers, in order to form strategic alliances. “Without strategic partners, the project is not going to be the economic driver you’re hoping for.”
Schmieder agreed that people are the most important component in the whole process. “They have to have the right collaborative mindset to get other people with differing agendas to come to the table. You need the right person upfront who knows how to do some horse trading, who knows how to stroke some egos, and convince people to get onboard.”