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Super Bowl May Benefit Dallas More Than City That Built Stadium

Dallas Cowboys owner Jerry Jones and the city of Arlington gave all 135 North Texas cities a gift when they built the $1.2 billion stadium that will host the Super Bowl in two days, said Ross Perot Jr.

“We now have the attention of the world focused on Dallas and Fort Worth,” said Perot, 52, chairman of Hillwood Development Co., a Dallas-based real estate company.

While Arlington invested $325 million from sales taxes toward the cost of Cowboys Stadium, the cities Dallas and Fort Worth stand to reap most of the benefit from almost $400 million in estimated spending at the National Football League’s title game, said Craig Depkin, economics professor at the University of North Carolina in Charlotte. The cities, with a combined population of 2 million, have more hotel rooms, restaurants and entertainment venues where visitors will spend before, during and after the Feb. 6 game.

“We’re very thankful the voters of Arlington helped construct that beautiful stadium,” said David Berzina, executive vice president of economic development for the Fort Worth Chamber of Commerce. “Multiple cities will share in the windfall.”

Robert Cluck, the mayor of Arlington, which is midway between Dallas and Fort Worth, said his city collected a record $57.5 million in sales taxes last year, up from $53 million, in part because of the stadium. Getting the Super Bowl, however, took a group effort, he said.

“We approached this as being a North Texas Super Bowl,” Cluck said in a telephone interview. “We knew the only way to make it bigger and better was to all work together.”

Business Investment

Besides Arlington’s investment in the stadium and a little more than $31 million in rebated tax revenue to cover costs, most of the investment to win the Super Bowl came from local companies, including Perot’s Hillwood, a real estate developer, and businesses that contributed $40 million.

Super Bowl events are scattered around the region. The NFL Experience, a football-themed carnival, is at the Dallas Convention Center. Taste of the NFL, a food and wine event featuring restaurants from every NFL city, is in Fort Worth.

The estimated 150,000 visitors will consume “a lot of coffee, a lot of meals and a lot of hotel rooms,” Berzina said.

Conflicting Figures

Just how much revenue the fans will generate is in dispute.

A study for the North Texas Super Bowl XLV Host Committee in early 2010 estimated the game would generate $374.7 million in direct spending. The research, by La Mesa, California-based Marketing Information Masters Inc., projected the state would reap $36.2 million in additional taxes, with local cities and counties getting $10.5 million.

PriceWaterhouseCoopers LLC found that the Super Bowl may bring record visitors and spending to North Texas. The accounting firm said spending by the NFL and visitors will total about $202 million, ahead of the previous high of $195 million generated by the 2007 game in South Florida.

“Dallas/Fort Worth appears ready to capture much of the fan and corporate spending that might have stayed away over the past two years,” Robert Canton, director of the company’s sports and tourism sector, said in a news release.

Others are more skeptical of the benefits. The University of North Carolina’s Depkin said it isn’t certain the Super Bowl will generate extra tax revenue. Sometimes the event supplants spending on other forms of entertainment, or displaces local residents who decide not to go out when the game is in town, said Depkin, who has studied spending around major events.

Lower Gains

In a 2004 study called “Padding Required: Assessing the Economic Impact of the Super Bowl,” economists Victor Matheson and Robert Baade found the income gains from the game were typically “one quarter or less” than estimates, or about $92 million on average.

“The question is whether the additional sales tax is enough to offset the spending by the state,” said Depkin.

Brian McCarthy, an NFL spokesman, said the league didn’t have specifics on Super Bowl spending.

The weather during Super Bowl week hasn’t helped business owners. North Texas has been hit by the coldest temperatures in the region for 20 years, making Pittsburgh Steelers and Green Bay Packers fans feel at home while keeping trade light.

“Business is 50 percent down on our projections,” said Scott Jones, owner of the Cowtown Diner, which is less than a block from Walt Disney Co. network ESPN’s main Super Bowl broadcast location in Fort Worth’s Sundance Square. “We had to close Tuesday and foot traffic has been nowhere near what we expected since. Hopefully a weekend warm-up will have people coming out in droves.”

Hotels Boon

While cold weather slowed restaurant sales, hotels are packed.

“We’re sold out,” said Ray Hammer, general manager of the Sheraton in downtown Dallas, which is housing the media center for 3,000 journalists in town for the game.

The 1,840-room hotel, owned by Starwood Hotels & Resorts Worldwide Inc., spent $91 million on improvements ahead of the game and business is up 50 percent from a year ago. There was also an upsurge in bookings in 2010 from 2009 because the National Basketball Association All-Star Game was played Feb. 14 last year at Cowboys Stadium.

Like Perot, Mabrie Jackson, chief executive of the North Texas Commission, which coordinates the efforts of local governments for common projects such as luring a Super Bowl, said the game is about more than generating immediate income. It provides an unparalleled marketing opportunity to show that the region is about more than “cowboy boots and oil wells.”

“North Texas is holding its door open wide and letting people stay a while,” said Jackson. “It’s more money, but it also is about introducing North Texas to the rest of the country.”

To contact the reporters on this story: Darrell Preston in Dallas at dpreston@bloomberg.net; Aaron Kuriloff in New York at akuriloff@bloomberg.net

To contact the editors responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net; Michael Sillup at msillup@bloomberg.net

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