Against Entertainment Districts-A Guest Post from Llenrock Group
Apr 15, 2014
This post from Eric Hawthorn is part of our Llenrock Group guest post series and originally appeared on the Llenrock Group blog.
Let’s talk about downtown entertainment districts. You know the kind: a planned city development featuring at least one anchor establishment (a hotel, for instance, or a large cinema or sports stadium), with hundreds of thousands of square feet of bars, higher-class chain restaurants, and retail offerings. The entertainment district usually comes with a trendy, brand-able name like So-and-so Street or Such-and-such Village and has lots of modern, sleek architecture, evenly planted trees, and packs of drunk bros (drunk bros only come in packs). Entertainment districts usually look like a chain sports bar or Dave & Buster’s exploded across eight acres.
Why do these things exist? What benefits do they serve to their community? What are the costs?
I recently discovered an old article on StrongTowns.org, in which Nathaniel Hood explores the costs and benefits of what the article termed “overnight” entertainment districts (i.e., planned districts, as opposed to those that evolve into entertainment hotpots organically over many years). Here are a few highlights from this article. You may or may not agree with everything the author says, but you’ll probably find these thoughts intriguing:
…show me an existing or proposed entertainment district and I’ll show you a struggling city.
…Paris and Florence don’t have entertainment districts. Neither does San Francisco. Melbourne doesn’t either. What these cities have are spaces for people. They also have sports stadiums and bars – just not as the focal points of their city centers or of their new infrastructure investments. The problem boils down to something very simple: We are disconnecting our downtowns from all other aspects of life when we attempt to turn them into “entertainment districts”.
Throughout the article, which was written in 2012 but seems as current as ever, the author characterizes “entertainment districts” as a cash-strapped city’s attempt to fill its coffers (and well-connected developers’ pockets) by attracting out-of-towners and locals with a wide variety of entertainment offerings. Because entertainment districts may cost hundreds of millions of dollars to develop, they usually require a deal of city subsidization, which means the city’s fiscal stability (such as it is) is riding on the success of this venture. The author breaks down some of the challenges that come with entertainment districts, such as
- They’re single-use developments, by and large, and come with all the risks of non-diversified investment strategies
- They limit the city/submarket’s ability to grow organically, through diverse commercial enterprises (other than entertainment)
- They limit flexibility: the interests of a few individual parties (i.e., the biggest tenants) limit how (really, if) the district can evolve
- The disproportionate effect of failure: if the anchor tenant goes down (i.e., the movie theater, the hotel, the Dave & Buster’s), its neighbors follow suit
There are many examples of entertainment districts throughout the country. Recent developments include the Power & Light District in Kansas City and Ballpark Village(which just opened in St. Louis)–both of which were built by the Cornish Company of Baltimore. Both of these were built adjacent to major league sports stadiums, and both received a lot of public-sector backing. It’s too soon to tell how Ballpark Village will fare as an economic and real estate driver for the city, since it opened about a week ago, but the Power & Light District has already proven problematic for its hometown.
I wrote about this a couple years ago. This project, begun in the optimism of 2006, was financed in a way that created problems down the road. Kansas City issued almost $300 million in bonds to pay for its construction, but the district’s underperformance forced the city to pick up the rest of the tab (cutting spending for essentials, like roadwork and firefighters, as a result). The 8-block district enjoys a substantial nightlife, and its retail occupancy is better than in many neighborhoods, but this hasn’t been enough.
Timing is everything, and in the case of the optimistically envisioned Power & Light District, the timing was severely off. This might not be the case for St. Louis.
Still, the article I referenced above suggests there are long-term, urban-planning costs to entertainment districts as well. Though they may be intended to boost economic growth, they may in fact curb long-term growth, as residential and office developers are forced to look elsewhere (taking families, workers, and companies with them).