How one arena in a mid-size U.S. city drove a five-year tourism boost

The Sprint Center has rolled out another round of financial statistics to boost its case that it’s been a good deal for the city during its first five years of operation.

When we celebrated the arena’s fifth anniversary last October, the news was the glistening glass bowl at 13th and Grand had attracted 5.6 million people to more than 540 events ranging from Garth Brooks to Disney on Ice to Lady GaGa and Paul McCartney.

And as opposed to the Power & Light District across the street, it was on sound financial footing. The tax revenues approved by voters were covering the debt and it actually had yielded $7 million to the city through a profit-sharing agreement with its operator, Anschutz Entertainment Group.

Now, AEG has commissioned an economic impact study by Development Strategies, a St. Louis firm, to further bolster its case the arena was a wise investment. As with all economic impact studies, its results are a mix of conjecture and fact, but the numbers are interesting nonetheless.

When it comes to direct spending over its first five years, the Sprint Center kicked in $213.3 million to the city economy; another $202.7 million to the broader metropolitan economy, and an additional $227.1 million to the state of Missouri, according to the report.

“These numbers speak to the tremendous economic impact the Sprint Center has on Missouri on a year-to-year basis,” said Katie Steele Danner, director of the Missouri Division of Tourism.

That total of $643.1 million included what the report estimated as $280.6 million in spending by non-local visitors, about 44 percent of the total and perhaps the most hypothetical category of the study.

The remainder was harder data that included employee compensation, event-related spending, non-event operating expenses, vendor employee compensation, and spending by performers and their crews.

The Sprint Center itself employed 63 full-time employees and 440 part-time workers. But when all the other folks who touched a dollar generated by the arena were counted, the report estimated a ripple effect of about 2,000 other jobs were “supported” by the Sprint Center.

As for taxes generated directly and indirectly by the arena, the study estimated the city received $9.4 million during the first five years, and the state collected almost $19 million. Again, the caveat was some of those tax revenues were calculated using a “multiplier” formula.

Regardless of what you think of these sorts of studies, it’s clear the arena has been one of Kansas City’s bigger success stories in recent years. It was built on budget, operates without subsidies, brings lots of people downtown for a good time and is managed well by AEG.

“We are so proud of the success of the Sprint Center as a job creator and revenue generator,” said Brenda Tinnen, general manager. “We look forward to many more years of exciting entertinment that continues to spur growth and opportunities for our community.”

And by the way, the amount of money earned by AEG since it invested $53.2 million in return for a 35-year contract to manage and operate the arena was not part of the report.

(c)2013 The Kansas City Star (Kansas City, Mo.). Distributed by MCT Information Services.