Cities See Green in Sports Boom

Sports organizations are squeezing and thumping the Northwest Arkansas market and finding it ripe for the picking.

From the LPGA to the WNBA, Northwest Arkansas could be home to more than eight professional events and teams. Bringing two new venues, professional athletics could mean as much as $80 million annually for the area’s economy.

But is there enough low-hanging fruit in the form of discretionary spending dollars to justify the surge of sports?

Athletic events organizers are saying “yes” and are banking on the area’s population growth. Benton and Washington counties are estimated to grow to 449,451 by 2010, and may surpass a half million by 2015, according to the Northwest Arkansas Regional Planning Commission.

Chris Talley, who is building an 8,500-seat arena in Bentonville, said the population, as well as the economy, of the region is attractive to teams that may call his arena home. He said Forbes, Money Magazine and others have highlighted the area and its growth, and it’s a prime spot.

“[Here] you have the largest — the single largest — concentration of 450,000 folks without a professional sports league in the country,” he said.

Events in Rogers

The LPGA Northwest Arkansas Championship presented by John Q. Hammons will be Sept. 3-9, 2007, at Pinnacle Country Club. The local economic impact of this event is expected to be about $15 million, said Michelle Berish, marketing and communications manager for Octagon’s Golf Division. Octagon is the event organizer and manages a number of professional golf events.

“I know the national exposure will be a positive enhancement of our presence in the community in helping with the financial impact of Northwest Arkansas and will add value to our Pinnacle Country Club neighborhood as well as future membership growth,” said Pat Hennessy, Pinnacle Country Club general manager.

Hennessy said a conservative estimate of attendance for the event will range from 15,000 to 20,000 people per day.

Eddie Fugate, assistant research manager for the Department of Parks & Tourism, said the state figured that during spring 2006 one person spends an average of $61 per day when attending events.

These people will eat at local restaurants and buy gas to get around town. Also, the crowds of golf fans will occupy many hotel rooms, another bonus for Rogers because of the 13 percent hotel tax.

The hotel tax influences the way communities book events, said Beth Stephens, vice president of marketing for the Rogers-Lowell Area Chamber of Commerce and executive director for the Rogers Convention & Visitors Bureau.

“We have to turn anything we do into multi-day events,” she said.

One popular Beaver Lake-related event is the Wal-Mart FLW Tour, named after the founder of Flippin-based Ranger Boats, Forrest L. Wood. Started in 1996, the nationally-televised bass tournament is another money-maker.

“In terms of sporting events, that’s sort of our bread and butter in Rogers,” Stephens said.

Stephens said the city pays a $15,000 host fee, but reaps more than $4 million in revenue from spending related to the event.

“Sporting events are great for the community because they bring themselves, friends and family along with them,” she said.

Dave Washburn, vice president of communications for FLW Outdoors, said tour events usually bring in more than 900 people directly involved with the competition.

Figuring the average person stayed six days and nights, the FLW participants spend about $448,000 on hotels, $244,400 on food, $197,280 on fuel and $561,000 for shopping and supplies, or about $1.4 million total.

But the total impact is figured to be about $4.7 million as the money spreads through the community. This doesn’t even include the spectators who come to watch the event.

Wranglers Rewards

Bill Rogers, vice president for economic development of the Springdale Chamber of Commerce, said he’s excited about the shot-in-the-arm the Wranglers will bring to his town.

And the city won’t have to wait until opening day for a boost.

Rogers said the city expects construction of the new ballpark to create 500 new jobs and inject $44 million dollars into Springdale through the purchase of materials and labor wages.

Once up and running, the city expects $8.6 million worth of direct spending on everything from souvenirs to gas for family-packed SUVs. Using an economic multiplier, dollars are exchanged through the community, Rogers said. Springdale should see that $8.6 million to grow to about $13.7 million per year.

On top of that spending, projected revenues of $484,000 in state taxes, $101,000 in county taxes and $179,000 in city taxes also prove beneficial.

“That’s another $179,000 to pay firefighters and policemen,” he said.

Rogers said the stadium will create 270 new jobs each year and have a payroll of $6 million.

“This project was never about baseball because from this research we knew that this particular project would be an economic driver for this city,” Rogers said.

The economic stimulus alone for the team and stadium may be attractive, but Rogers said it does even more for the community.

“The icing on the cake is that Springdale will be, in 2008, a professional sports city,” he said. “The perception of our city is elevated on a local, state and — you can say — a national level.”

Wildhorse Entertainment

Wildhorse Entertainment Inc. owns two young teams, the American Basketball Association’s Arkansas Aeros and the Arkansas Stars of the National Indoor Football League.

Wildhorse was formed by a group of investors to purchase the failing NIFL Stars after the previous owners failed to pay players. Wildhorse purchased the team and covered back pay for players and for the use of the Randal Tyson Track Center, where the team played.

“It was a hard thing to do, but it seemed like a good opportunity for Northwest Arkansas and a shame to waste it,” said Charles Wilkerson, managing investor.

After examining the costs of operation, Wilkerson said the group wanted to expand operations year-round, so Wildhorse also bought into the ABA with the Aeros. Both teams will play at the Tyson center for the foreseeable future.

Wilkerson said operational costs for Wildhorse are about $500,000 per season for football and about $450,000 per season for basketball. Much of the costs are covered through sponsorships. The Stars have about $250,000 committed from sponsorships and the Aeros about $210,000.

To cover remaining operation costs, Wilkerson said, each game needs about 2,000 spectators.

Ticket prices start at $14 per game while season courtside seats fetch $450. The Aeros’ 18-game season begins in November.

Wilkerson said his company is still learning the ropes, so financial impact isn’t yet known, but it has had a good response from the community.

“This helps the whole area,” he said. “I’ve had several sponsors tell me that it helps them sell people on moving here.”

Wilkerson realizes that to stay competitive in this market though, his teams need to succeed.

“You have to have winners,” he said. “No one in Northwest Arkansas is going to come to see losers for the long term.”

Bentonville Arena

Bentonville is the latest to take the plunge into sports. Talley’s ASEP LLC announced Sept. 8 its plans for a multi-purpose arena to be completed in 2008. It will be located on Arkansas Highway 12 near the Northwest Arkansas Regional Airport. City West, the 90-acre project’s name, will cost $50 million and will center around the 8,500-seat arena.

The first athletic opportunity for the arena was interest from the East Coast Hockey League, an ‘AA’ league of 25 teams, from Anaheim to Atlanta. The group is hopeful that the ECHL will plant a team in Bentonville.

Talley, his investors and city officials also have met with NBA officials, including NBA commissioner David Stern, in Detroit and New York to discuss plans for the arena. Discussion gravitated toward the possibilities for a WNBA team and a National Basketball Development League team for the new arena.

“Those talks went very well, but there’s lots of things that have to fall into line in order for this to all come together,” said Ed Clifford, president and CEO of the Bentonville/Bella Vista Chamber of Commerce.

The Chamber’s role in discussions has been one of education, presenting demographics and economic information to investors and leagues’ representatives.

“Chris is a visionary,” Clifford said. “He’s the concept guy. The nuts and bolts are coming out of here.”

Comcast subsidiary Global Spectrum would manage the facility, booking acts and agreements. Clifford said the group believes it can book 140 to 160 events each year.

Talley said, while acknowledging his figures were conservative, he expects 375,000 people to walk through the turnstiles during the arena’s first year. He also expects that 25 percent of attendance will come from outside of Arkansas.

“That is brand new, fresh money brought into this economy,” Talley said.

Without the WNBA, Talley projects the arena will generate $35 million for the local economy, using a multiplier of 3 to 3.5. That could be increased to about $45 million with an WNBA team. These figures are also based on 40 percent capacity, so revenue could grow larger.

Like the stadium in Springdale, the money generated by construction of City West puts money in the hands of local businessmen. Talley said construction alone will generate about $125 million for the economy.

Dirt work will begin soon, Talley said, and he has a target date of Feb. 15 to pour the first footer for the building. He aims to finish construction by September 2008.

In addition to the arena, City West will include: a 16-screen movie theater, 32-lane bowling alley, movie and sound studio, hotels, and office and retail space. The facility will also include residential space with 500 condos.

“Our view of the arena is that it adds to the amenities to the area,” Clifford said. “It keeps people here longer. It’s a huge spike in, what’s right now, slow growth around the airport area.”