During a recent Denver City Council meeting, Ryan Fleming and fellow business advocates stepped up to the microphone. They urged city leaders to spend $70 million to help bring a new women’s professional soccer stadium to a dormant swath of Baker, arguing it would infuse the broader neighborhood with new life and customers.

“I couldn’t understand any logic why you wouldn’t want to do it,” said Fleming, an investor in a sports bar on South Broadway, adding that the ensuing tax revenue must be reason enough to approve the project.

But the true economic benefits aren’t so clear.

Decades of research show that when cities shell out millions of dollars to build stadiums, they rarely recoup their costs — and the local economies see limited growth. That’s according to an analysis of more than 130 studies of local government stadium deals published in 2022 in the Journal of Economic Surveys. Generally, research shows the facilities only move spending within different parts of a city, rather than bringing in new dollars.

“These are money pits,” said Geoffrey Propheter, a professor at the University of Colorado Denver who researches the economics of sports facilities. “The vast majority of the burden ends up being on taxpayers.”

Still, many supporters in the community — and Denver Mayor Mike Johnston, the city investment plan’s chief proponent — see the stadium project planned for the new National Women’s Soccer League team as a sign of hope for a blighted lot that has sat vacant, collecting trash and dirt, for over a decade.

The stadium would be built on the northwest portion of the 40-acre former Gates Rubber factory site. It’s tucked between the South Platte River, I-25 and the Broadway light rail station, located near a section of South Broadway that is underdeveloped. Store fronts sit empty and pedestrians rarely venture that far down the street from Broadway’s livelier blocks to the north.

The proposed deal with the new team’s ownership group calls for the city to spend tens of millions of dollars for the purchase of the property and for site and access improvements, while the team’s ownership group will be responsible for building the stadium itself.

Johnston, who announced the proposal alongside the team’s owner in April, has called the project “a transformational opportunity.”

“It’s been sitting empty and the neighbors have been waiting for this to be really activated as an economic opportunity,” he said in a recent meeting with Denver Post journalists.

Council members, some of whom are skeptical of the city’s plan and others supportive, will have to weigh that area’s hopes for revitalization with the uncertainty of how much the project would financially benefit the whole city. The council is set to take its first full vote on Johnston’s investment proposal Monday, with a final decision following on May 12.

The mayor’s administration, which designed the proposal with the team’s ownership, has produced its own economic study. It projects $2.2 billion in economic impact for the city over the next 30 years from the stadium and neighboring mixed-use development.

That impact was calculated through a complicated economic modeling process that considers direct and indirect spending from construction as well as tax revenue and consumer purchases. It’s difficult to quantify how much of that is projected to be from the spending of “new” dollars — rather than just a reallocation of spending that would have occurred anyway in other areas of the city.

If the council doesn’t agree to pitch in the $70 million, the team is unlikely to stay in Denver, the ownership group’s leader, Rob Cohen, told the council last month.

“Show us that we matter, too”

Under the proposal, the city would spend up to $50 million for the land and another $20 million for improvements to the surrounding area. The team, which hasn’t been named yet, would build a 14,500-seat stadium there at a cost of $150 million to $200 million. It also plans to bring in partners to build a neighboring mixed-use development with housing and restaurants.

Beyond the murkiness of the economic benefits is the prospect of building one of the first stadiums dedicated to women’s sports in the world.

For many, that’s the most important consideration.

“Show us women and girls of Denver that we deserve the opportunity and facilities that the men do,” Sydnee Mitchell told the council during that same meeting in April. “Show us that we matter, too.”

The city’s economic analysis also emphasizes that factor.

“The long-term community benefits such as community pride, local identity, opportunity for women in sports and youth engagement have the potential to make this project not just about dollars — but civic identity, opportunity and inspiring the next generation,” according to the analysis.

The city report also says the project would create 1,100 jobs, with a significant portion of that coming from indirect and “induced jobs,” defined as “additional jobs created as direct and indirect workers spend their earnings in the community.”

The study’s authors made their calculations assuming that the neighboring development would bring in $700 million in construction spending on a hotel, restaurants and 2,500 housing units. They also assumed that only 10% of attendees would be people from outside metro Denver.

Outside studies from a broad set of economists and journals have found that the economic benefits of stadiums are often overstated in analyses like these.

One reason the city-produced research has limited usefulness, Propheter said, is because its analysts don’t consider other possible uses of the dollars.

“An economic impact study only tells you one piece of information: the benefits,” he said. “It does not tell you what are the benefits of competing uses of funds, and what are the costs of all possible uses?”

City hasn’t done full cost-benefit analysis

While the city’s study took a limited look at the opportunity costs — the trade-offs of not pursuing alternative options — the in-house economist doesn’t yet have enough information to perform a full cost-benefit analysis that considers all possible uses of the $70 million, said Laura Swartz, the spokesperson for the city’s Department of Finance.

The project may offer limited benefits to restaurants and bars in the immediate area, but it’s unlikely to have much impact on the overall economy of the city, Propheter said.

“Why is moving money from one part of the city to another part of the city a good use of taxpayer dollars?” he said.

Because of a tax-break measure already approved for the former Gates site, the city also wouldn’t have a chance to collect property or sales tax there until 2043.

The team plans to ask for permission to obtain additional tax breaks to help recoup the cost of the stadium, said Dan Barrett, an advisor to the ownership group, during an April 29 meeting between the council and the mayor.

Johnston said the city would have to approve such a request, including deciding whether it has a public purpose.

Under a plan laid out by the Department of Finance, Denver largely would spend interest money that’s accrued in its 2017 Elevate Denver bond program for its contribution. That money would be used indirectly, with the city putting it toward other city projects that are being paid for through its capital projects fund; that saved money would then be used for the stadium.

Councilwoman Sarah Parady has said she’s worried that, given the uncertainty of the worldwide economy, the project will never come to fruition. That’s what happened in Commerce City with development around Dick’s Sporting Goods Park.

Opened in 2007, the stadium was originally meant to be the centerpiece of a 600,000-square-foot development to include housing, shops, restaurants and offices. Voters there approved a $64 million bond to help finance it.

The owners never built out the project, though.

“These are completely different projects,” said Cohen, the Denver NWSL team owner, pointing instead to the revitalization of Lower Downtown that occurred in the 1990s when the Colorado Rockies’ ballpark opened. “I think it is more comparable to Coors Field than it is to the stadium in Commerce City.”

If the council approves the agreement for the NWSL stadium, the team will begin soliciting public input and designing the site. The council would have a chance to consider the detailed plan in the fall — and if the project moves forward, construction would unfold with the goal of a 2028 opening for the stadium.

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