As I was catching up on my reading, I came across this article in the Wall Street Journal. "So Long to the Suite Life" is all about how major sports stadiums are ripping out their suites and replacing them with either party rooms, press boxes, or other uses. Why? Because they're having trouble selling the boxes.
Some of the reasons for the declining use of such suites, according to the article, include changes in tax laws, scandal-driven changes in corporate accounting rules and a lack of clients to fill the seats. As one company said, "...taking clients on fishing trips is a better -- and more cost-effective -- way to get face time."
Additionally, the article says, "There are other reasons for declining interest in suites. Now that a greater number of companies have them, the perk has become less glamorous and is thus less of a draw. At the same time, more executives believe they can schmooze clients more easily and more effectively -- and at less of a cost -- in other ways."
And with declining use comes issues of what to do with the suites. While some are converting the unused suites to other uses, the Detroit Pistons decided to 'bribe' some suite holders by offering a $50,000 food credit and a $20,000 credit to buy tickets to concerts and other events held at their arena. The Seattle Mariners decided to offer suites for only part of the games - instead of for the full season.
The articles states: "Prior to the 1990s, sports stadiums and arenas were built mostly with public money and bonds. But in the 1990s, the formula changed, as public money dried up, along with taxpayers' appetite for subsidizing sports teams whose contributions to the local economy were being increasingly questioned. The new model called for sports-team owners to pay some of the cost upfront or back the bonds with specific revenue sources like parking, concessions and tickets." Those up-front costs were also covered by suite sales.
So the impact of unleased suites can be significant. As the article explains:
"In the late '90s, almost all of the more than 120 luxury suites at the Cleveland Indians' Jacobs Field were sold. The team says it has fewer than 90 suites leased for this season. The Seattle Supersonics used to lease more than enough of the 48 suites at KeyArena to cover the team and city's debt on the facility. Now only half of the suites are full and the team is deep in the hole and asking for $300 million in public funds to build a new arena."
While some of the major sports team are coming up with creative ways to continue the appeal of their suites, I can't help but wonder if Lucas County will learn any lessons from this article...or if anyone even bothered to read it.