Developing near amateur sports facilities

Youth and amateur sports, long considered a weekend activity and a wholesome pastime, have slowly evolved into a multimillion-dollar business. According to Sports Business Journal, more than $9 billion has been put into building amateur sports complexes since 2017. In Florida alone, more than 10 sports complexes have been built in the past decade. Unlike in the past, these sports complexes are not built as standalone properties; instead, they combine hotels, restaurants, and entertainment, thereby working as a local economic generator. Does this pattern of activity indicate that developing property in close proximity to amateur sports facilities is rewarded with superior performance? Even though the concept seems clear, supporting evidence is murky.

Academic literature primarily examines the causal impact of professional sports facilities, leaving research on amateur sports comparatively sparse. Overall, existing studies caution against the common narrative that professional sports venues generate substantial economic benefits. A key insight is that revenue generation in professional sports is highly event-driven, so activity at any given facility occurs relatively infrequently and is concentrated in the venue.

In contrast to professional sports facilities, non-professional multisport complexes encourage extended stays with frequent entry and exit to/from the given venue. They can host events more frequently and also serve as active recreation hubs for local residents. Many newer facilities appear to be embracing this model by integrating more closely with local business development and community needs. This extended reach has the potential to keep neighboring property owners’ spreadsheets humming while the scoreboard across the street is ticking.

Integrated development

Paradise Coast Sports Complex (PCSC) in Collier County is a recent example of how multisport facilities integrate into the neighborhood economy. PCSC is located next to the Great Wolf Lodge in Naples, which houses the largest (92,000 square-foot) indoor water park in the country. The combined venue location rewards families visiting for a weekend tournament with overnight accommodation and between-game entertainment.

Alachua County — home of multiple sports facilities — hosted 47 sports events in the fiscal year 2023-2024, generating 47,060 local hotel room nights and adding more than $16 million in revenue from 100,000-plus visitors.

Real estate developers often take such success stories as a cue in their next site selection. Cary Goldberg, president of Diversified Companies, said in a conversation with the Bergstrom Center that after the opening of the Boombah Sports Complex in Sanford, interest in the surrounding area grew. “Next thing you know, you got hotels coming in,” said Goldberg, whose company acquired a nearby property. “Now you got Publix wanting to be there.” He added that developers wanting to build multifamily properties soon followed.

These examples do not exist in isolation. In recent years, commercial developments have ramped up around sports complexes. Figure 1 shows new parcels for hotels, motels, and restaurants around sports complexes built in 2006 or later in Florida. This evaluation concentrates on lodging and dining properties because of the apparent linkage between tournament sports events and these activities. Travelling families and participants require lodging and dining for multi-day events, while visitors and spectators must refuel between games. These two sectors are the most closely tied businesses to tournament venues.

Figure 1 – New parcels by year and distance

Source: Florida Department of Revenue; Florida Geographic Data Library

Prior to 2022, more hotels were developed in the ring between 5 and 10 miles of amateur sports centers than within 5 miles of the subject sites. In 2022, however, more hotel parcels were developed within 5 miles of sports venues than the outer ring – a trend that continued through 2023. Restaurants were also developed in a greater number nearby than in the outer ring in 2023. This raises questions about the potential for exceptional performance in close proximity to these venues.

Following the lead of this transition, we take a look at historical appreciation data to determine if hotels and restaurants near these sports complexes have experienced an enhanced growth rate compared to properties located beyond a 5-mile radius. Our analysis suggests that it’s not as rosy as it appears at first glance.

Neighborhood property value observation

We concentrate on hotel and motel parcels within 10 miles of a sports complex that operated between 2005 and 2024. Splitting the distance in half, we compare parcels within 5 miles (near) of a venue to those located between 5 and 10 miles (far) of the same sports venue. Figure 2 shows the average year-to-year growth rate in parcel assessed values (in 2005 dollars) around some popular venues in Florida. Each chart presents relative hotel property appreciation between near and far locations for a specific sports facility. Values below zero indicate declining assessed value for the collective properties within the distance ring.

Figure 2 – Average annual value growth: hotel and motel parcels 

Source: Florida Department of Revenue; Florida Geographic Data Library

Covering 175 acres, with a seating capacity of 4,600 and more than 20 athletic fields, PCSC has been in operation since 2020. Hotel values near and far from PCSC have both appreciated and depreciated in given years since the middle of the last decade. The unexpected spike in hotel values during 2020 is filled with hidden information. Property assessments are established at the beginning of the year, so many values (unless adjusted midyear) will not reflect the COVID effect that we expect. Also, 2020 is the year that PCSC opened for scheduled events. We might interpret this growth as assessor anticipation that the new complex would enhance hotel values before the recognition that the pandemic interrupted all activity. For example, Holiday Inn Express Naples South, located just six minutes from PCSC, has been operating since 1998. Its appraised value rose from $3.4 million in 2019 to $6.9 million in 2020 – scoring a 100% increase. Within a mile of the sports complex, Woodspring Suites Naples was built in 2020 with an initial valuation of $11.1 million. Hotels farther from the venue experienced sharp increases in appraised values after 2020, specifically during 2022. This jump likely reflects a rebound from any pandemic-related declines.

The Ansin Sports Complex in Broward County’s Miramar, the Derbyshire Sports Complex in Volusia County’s Daytona Beach, and a new Miami Springs Sports Complex — which added an aquatic center in 2016 — in Miami-Dade County all showed co-movements of near and far hotel growth in value over the years. Taken together, these plots do not support the hypothesis that nearby properties performed better than more distant properties.

Restaurants represent the other half of the picture. Grabbing lunch or dinner between games close to the venue seems more important than staying nearby overnight. Naturally, one may be curious if restaurant assessed value growth is different than that of hotel value growth. Restaurants are often smaller ventures than hotels and can benefit from local visitors, which is an advantage. As before, we look at restaurants within 5 miles and between 5 and 10 miles of each sports venue. In Figure 3, we show average growth rates of restaurant values (in 2005 dollars) around the same four complexes explored above.

Figure 3 – Average annual value growth: restaurant and cafe parcels 

Source: Florida Department of Revenue; Florida Geographic Data Library

Observational patterns for restaurants are remarkably aligned with those for hotels. These lines show a bit more volatility but lead to the same conclusion that nearby properties appreciated and depreciated at similar rates as did more distant properties. The PCSC chart teases us a bit when the near-line jumps as the far-line falls in 2021, following the introduction of the facility. However, this quickly reverses back into balance.

Restaurants in close proximity to the Ansin Sports Complex appreciated more than restaurants located more than five miles away for five years following opening day. This chart is the most consistent with our hypothesis that sports centers enhance nearby restaurant values. However, a pattern reversal occurred after 2015, eroding the initial exceptional growth. The Miami Springs Recreation Center produced the opposite pattern, with restaurants farther from the venue outperforming closer ones for the years following opening. The Derbyshire Sports Complex did not exhibit a clear pattern.

Many factors can influence conclusions drawn from this type of visual analysis, but the results dampen our expectations of exceptional value creation by proximity to amateur sports complexes. One complication is the number of hotels and restaurants in the subject property’s vicinity. For example, around the Easton Newberry Sports Complex in Alachua County, it is relatively easy to find a fast-food chain like Hardee’s or a locally owned popular barbecue place like Woodyard’s Grill within a 5-minute drive. However, lodging options were virtually nonexistent prior to the venue opening, with only one hotel within a 10-mile radius, and the area remains mostly undeveloped. In contrast, within 5 miles of Miami Springs Community Center, more hotels than one can quickly count exist. Another complication with this analysis is the confounding effect of other adjacent properties, such as airports, city centers, and natural attractions. Perhaps a more rigorous analysis will reveal the exceptional value in sports proximity that escapes us in simple observation.

Analytical results

We take all these differences and account for factors such as proximity to downtowns, major venues and airports, local demographics, number of restaurants, year-to-year shocks like the pandemic, and broader location advantages and combine them within an analytical framework. As with the prior analysis, we compare hotels within 5 miles of each sports complex to those 5 to 10 miles from the complex. Regression results confirm the pattern observed in the previous figures. There is no significant difference in the average growth rate of assessed values between near and far properties (log-difference in real-growth: 0.012, se=0.011, N=90,706).

Similar to the hotel analysis, we computed a regression coefficient that reflects the difference between the average growth rate of nearby restaurants and the distant ones. As before, it indicates that nearby restaurants appreciated at the same pace as the ones between 5 and 10 miles (log-difference in growth: -0.004, se=0.003, N=49,806), delivering no discernible statistical difference in results from hotel parcels. Thus, regression analysis, accounting for many of the factors that could cloud visual findings, indicates no measurable value gain for properties within close proximity to amateur sports venues.

No benefit, no loss

Neither anecdotal nor analytical findings lend enough credibility to support that closer is necessarily better in terms of lodging or restaurant property assessed value growth rates, which may proxy returns. However, this result should not thwart investment. We cannot confirm that sports venues create a value boost nearby, nor can we suggest that they hurt value. Rather, developers should maintain due diligence around all factors affecting a hotel or restaurant site without expecting a new amateur sports complex to drive results.

As is often the case, these sports facilities are introduced in relatively undeveloped areas. Developers are the very ones determining if an area has changed enough to drive new demand supporting additional property. Factors such as low-cost land, community cooperation, dedicated financing options, etc., may enhance returns that we cannot observe in assessed value appreciation. Our analysis simply suggests that you should not expect a “value pop” solely from a new sports complex.