While the Dallas Mavericks and the Dallas Stars have racked up wins in their five years at American Airlines Center, Victory Park has been raking in the dough.
That’s the conclusion of a study commissioned by the American Airlines Center’s operators and the developer of Victory Park — Hillwood and partner Hicks Holdings LLC. American Airlines Center is part of Victory Park, a blend of high-end residential and commercial development near downtown Dallas.
The study, which was completed by the Plano office of Conventions Sports & Leisure International, a firm whose studies include the economic impact of sporting venues and operations, states that:
— The development will generate $1 billion annually in cash, nearly $250 million more than was originally predicted.
— By its 2009 completion, the project will create 11,000 full-time, permanent jobs, compared to the 8,100 jobs originally projected.
— The city of Dallas, which spent $137 million on the development, will see a 48% profit on the deal.
Key to the success — besides the Mavs’ and Stars’ records — is combining the city-owned sports facility with a mix of retail and residential developments, said Russ Simons, a principal at HOK Sport Facility Operations’ evaluation and analysis group in Nashville. Kansas City, Mo.-based HOK is a nationally renowned sports facility design consultant.
The Dallas Business Journal asked Simons — who wasn’t involved in the study — to review Conventions Sports & Leisure International’s report, which is expected to be made public Nov. 10.
Simons said the development reflects a nationwide trend of pairing athletic complexes with commercial and retail developments to create year-round attractions.
One similar example Simons cited was the Staples Center in Los Angeles where, in September 2005, ESPN announced plans to build a five-story, $100 million mixed-use development.
Victory Park spans 75 acres and will include 4,000 residences and 4 million square feet of office and retail space, according to the report.
The study, which industry experts estimate cost up to $150,000, included a University of Dallas survey that showed higher-than-anticipated spending from arena crowds.
“We were pleasantly surprised with, when the Big 12 and NCAA tournaments are in town, how much they were spending,” said Brad Mayne, president of the Center Operating Co., which runs the American Airlines Center and is owned by Mavericks owner Mark Cuban, Stars and Texas Rangers owner Tom Hicks and businessman Ross Perot Jr.
Mayne said the study was conducted to mark the five-year anniversary of the completion of the $420 million American Airlines Center.
The University of Dallas surveyed 1,350 American Airlines Center patrons between March and April and found they spent an average of $355 on lodging, meals, transportation, shopping and entertainment.
Another surpise to Mayne was the distance patrons traveled to attend events at the center. It’s not uncommon to draw people from southern Oklahoma to events, Mayne said.
Bill Rhoda, who authored the study for Conventions Sports & Leisure, said the development is succeeding for a blend of reasons:
— If city of Dallas hadn’t converted the abandoned city dump, a former rail yard and an aging power plant into usable land, the development wouldn’t have happened.
— A variety of events — including the Big 12 and NCAA basketball tournaments, rodeos and big-name concerts — have kept the center’s seats filled.
Though Dallas has a smaller market than Los Angeles, it has managed to successfully combine a sports venue with a large real estate development — a relatively difficult task to pull off.