The Louisville Arena – Are Sports Arenas a Good Catalyst of Economic Growth?

I need some help from those of you that live in areas with recently built sports arenas. Louisville has decided to build one, and I was all for it. I mean, arenas are cool, and I'd like to see more action downtown so it sounds good, right? Maybe not.

First of all, the owner of Papa John's (which is based here in Louisville) flew in a sports economist to talk to the arena task force. The economist basically said arenas don't justify the investment. Most of them lose money and the ones that do make money don't make much. Well, the prediction here is that this arena will save Louisville and jumpstart economic growth.

After reading this I had a little cognitive dissonance going on so I decided to investigate. Sure enough, most of the academic literature agrees that arenas are usually bad ideas. So I started my personal campaign, telling everyone I know "Let's don't kid ourselves about the economic impact. Let's call it what it is, vanity." The truth is, I think, that people here believe Louisville needs an arena so that we can keep par with cities like Cincinnatti, Nashville, Indy, etc. So my point has been let's don't lie about the economic advantages.

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Then the state decided to kick in $75 million dollars, which made me aggravated because that money comes from tax payers and most of them will, like me, problemably only go to the arena once or twice ever. So I was ticked and posted some of my research findings here, at a Louisville blog site.

Today I get an email from the local Young Professionals group telling me to call state legistlators and get them to support the arena. This is really starting to make me mad. Does no one else look at this research? Is Louisville somehow a special case? They are still making the argument that this is a great economic deal.

So my question is this. Do any of you live in a place where this has happened? If so, has a new arena improved your city? I'm 100% willing to change my mind and support this thing if someone can convince me that all these economic studies by professors are wrong and all the ones by the consultants are correct.

Do arenas really lead to economic growth? And if they are such good investments, why aren't private investors lined up to fund them? Why do we need the public money?