There's a simple way to see the two sides of the Omaha arena boom, an easy way to view both the promise and the peril of having four — likely soon to be five major arenas dotting the area's landscape.
Just drive across town.
On Friday morning, the brand-new Ralston Arena at 72nd and Q Streets hummed with activity. Men in hard hats spray-painted crosswalks and polished the entrance sign.
A Pepsi truck delivered soft drinks. Two giant tour buses idled behind the arena. At some point during the day, country star Rodney Atkins would climb off one of those buses and prepare for his sold-out show.
Just across the river on Interstate 80, Council Bluffs' Mid-America Center sat quiet and empty. Not a car, an employee or a country music star in sight. Weeds have sprouted through the cracks in the parking lot. Faded signs in nearby empty lots advertise “prime land for sale.”
The Ralston Arena officially opened this weekend with a signature tenant, the Omaha Lancers, and plenty of local confidence that the city and state's $36 million investment will pay off in a big way for the Omaha suburb.
The Council Bluffs arena once had the Lancers and that confidence, too. Now the decade-old Mid-America Center has no permanent tenants but plenty of problems. Chief among them: It's losing about $700,000 a year in taxpayer money.
“I thought it was smart when we built it. I thought I was a pretty smart guy,” says Council Bluffs Mayor Tom Hanafan. “The place was packed and people are coming up and patting you on the back. And then, all of a sudden, it changes.”
Local officials and backers are confident that the vast majority of the Omaha metro area's sporting venues are financially stable and will host packed crowds and generate both revenue and excitement for years to come.
But national experts caution that the city's entertainment dollar could be stretched thin like taffy, especially if and when the city's fifth arena — UNO's planned hockey and basketball arena — and the giant new arena going up in Lincoln's Haymarket district both become reality.
This matters because local taxpayers have serious skin in the game: Some $425 million in public money has been spent, committed or proposed to build the Omaha-area arenas and two ballparks in the last 10 years. That total doesn't count interest on the debt that Omaha and suburban governments will be paying off for decades.
“There have been many, many, many cases of these multiple arenas in small and medium-sized cities really being boondoggles,” said Victor Matheson, an economist who, along with famed economist Robert Baade, has authored several influential studies on the public financing of stadiums and arenas.
“Somebody's going to be left out every time. I have small kids, and I can tell you that musical chairs never ends well.”
The University of Nebraska at Omaha's planned arena shows how a new venue could hurt the city's existing arenas.
The planned arena, to be built on the school's South Campus near Aksarben Village, would house the Mavs' hockey team when it opens in 2015 or 2016. The team is a tenant for Omaha's downtown CenturyLink Center, which hosted 19 Mavs home games last season.
The Metropolitan Entertainment and Convention Authority, which runs the CenturyLink Center, declined to provide The World-Herald information on how much money it makes off Mavs hockey, or how much it stands to lose when the Mavs move.
“Is this going to affect us? Sure,” said John Lund, chairman of the MECA board. “We'll take this bit of a lemon and try to turn it into lemonade.”
The Mavs men's basketball team would also eventually move from the Ralston Arena, its current home, to the on-campus arena
The Ralston Arena lured its other major tenant, the Lancers, from the Civic Auditorium, which several years ago pulled the Lancers away from the Mid-America Center.
The Lancers now play in an arena that's the perfect size and in the perfect central location for the team, says Lancers owner Ben Robert, who terms himself “probably the happiest junior hockey owner in the country.”
The Lancers also appear to have a more team-friendly deal than they had at the Mid-America Center. The Lancers pay no rent in Ralston like they once did in Council Bluffs, though Robert said that some of that advantage will be offset by the fact that Ralston reaps all the profit from concessions. (The Council Bluffs deal gave the Lancers a slice of concessions profits.)
Robert says the increased competition for tenants like the Lancers played no part in the team's moves around town.
Council Bluffs officials beg to differ.
“Let's just say (the Lancers) understand the meaning of the term, 'leverage,'” said Art Hill, Council Bluffs' finance director.
In Sarpy County, the Omaha Storm Chasers got a perfectly sized ballpark in Werner Park, $1.5 million from naming rights and the revenue from advertising throughout the stadium. The county, which gets lease payments from the team, is footing most of the nearly $50 million bill for bond payments and interest.
There is plenty of good news: The Storm Chasers drew nearly a half-million fans to Werner Park last summer, their highest total attendance in 15 years.
The CenturyLink Center is turning a profit every year, according to MECA, though that profit doesn't go to pay down the city's debt on the project. At the end of last year, the balance on the borrowed money was $205.9 million.
Ralston has already lined up 125 events to fill its arena during its first year, said Curtis Webb, the arena's general manager. Officials from both areas believe they have staked out a smart and financially stable part of the area's sports and music business.
With 3,500 seats, Ralston Arena is much smaller than either CenturyLink Center or the Mid-America Center.
“I think Ralston has a nice little niche,” says State Sen. Steve Lathrop, who represents Ralston and helped to enact arena incentive legislation that will help Ralston pay for the construction.
But a vast amount of research done by economists across the ideological spectrum says that a new arena, no matter what niche it fills, doesn't create economic growth in a metropolitan area.
Instead, sporting venues tend to tangle with one another, as well as with movie theaters, bowling alleys and casinos, for the finite amount of money that a city's residents can spend on entertainment. The Omaha metro area only truly benefits, economists said, when big events bring in large numbers of tourists and their wallets, such as during the College World Series or a Bruce Springsteen concert.
“The bottom line, or the punch line, is that there's just very little to no net economic impact from one of these arenas or stadiums, let alone a whole bunch,” said Allen Sanderson, a University of Chicago economist who has studied arenas and sporting events for decades.
That lack of economic growth doesn't much matter if Sarpy County's Werner Park or Ralston's arena are seen as places that make Omaha and its suburbs a better place to live, no matter whether they are ultimately profitable, said Eric Thompson, a University of Nebraska-Lincoln economics professor and director of the school's Bureau of Business Research.
Politicians often sell new arenas as good business ventures, despite all evidence to the contrary, he said. But publicly financed arenas don't function like a business, he argued. On one hand, they compete for teams and fans. But then, if they are unsuccessful, they don't close as an unsuccessful restaurant or store would. Instead, they are propped up with public money.
“The most appropriate way to look at this is the way we look at a city park,” Thompson said. “Is this going to be cool? Are we going to enjoy it? Is building something cool worth the cost? That's the central question we should be asking ourselves ... because these things usually just aren't the shrewdest investments.”
As Ralston opens its arena, Lincoln constructs one and UNO prepares to build its own, officials who run the existing arenas say they will adapt.
Lund, the MECA chairman, said the CenturyLink Center could possibly pull in a new tenant to replace UNO hockey, though he said it was far too early to know what team or group might take the Mavs' place.
The Mid-America Center has a new management company and new plans about how to fill its arena. While the facility still holds events, such as today's Wedding Essentials Idea Show, it might try for more high school and junior sports, Hanafan said. Or possibly more concerts.
“The truth is, the metro area is only so big,” Hanafan said. “There may not be enough room for this many arenas. At some point, it's just pure numbers.”
World-Herald staff writer John Ferak contributed to this report.
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Area arenas competing for events