Proximate development: an alternate justification for public investment in major sport facilities?

As skepticism has grown toward the purported economic impact of major sport facilities on a community, advocates have redirected their justification toward the proximate structural development they stimulate and the social capital emanating from their presence. Analyses in this paper are confined to returns on investment in sport facilities from proximate structural development. Advocates invariably claim such benefits will accrue, but frequently they do not. Based on a review of multiple cases, it is suggested that at the city level an acceptable return is dependent on there being a critical mass of complementary attractions, while at the regional level the requirement is a critical mass of businesses that “feed off” the sport facilities. In the context of mega events, the return may be in the form of environmental rehabilitation, a legacy of long-term usable facilities, or “fast-tracked” infrastructure improvements. In all contexts, success is dependent on the extent to which the sport projects are part of a holistic plan. The challenge of stimulating proximate development is exacerbated by the private facility operators’ goal of capturing all discretionary spending by visitors to their facilities and minimizing visitor spending outside their facility.