The Benefits and Challenges of Developing Sports and Entertainment Districts

These high-profile projects are increasingly influencing urban real estate strategies.

Professional sports franchises bring prestige, community involvement and, importantly, significant and diverse sources of revenue to cities and their inhabitants.

An ever-growing roster of cities and private investors are partnering to attain this cultural pinnacle by developing mixed-use sports and entertainment districts. These districts are planned urban areas that integrate multiple types of real estate uses, such as residential buildings, retail stores, restaurants, hotels and office space, all surrounding the crown jewel of a professional sports venue. The districts are designed to generate economic activity well beyond the sporting events themselves by fostering vibrant, walkable communities that attract visitors, businesses and residents year-round. These modern developments are not only reshaping how fans engage with their teams but also transforming urban real estate strategies.

Developers and others in the commercial real estate industry have unique opportunities to participate in these high-profile projects — not just as builders but as equity partners, infrastructure investors and long-term asset managers. For CRE professionals, the right approach can unlock diversified revenue streams, public incentive alignment and brand-defining urban revitalization.

Big League Utah, a coalition of high-profile business and civic leaders in Salt Lake City, including Gov. Spencer Cox and billionaire Gail Miller, put forth proposals to partner with the municipality to attract a Major League Baseball (MLB) team to the city. Similarly, the Orlando Dreamers, co-founded by the late Orlando Magic executive Pat Williams, has secured $2.5 billion in funding based on its proposal for a 45,000-seat domed baseball stadium near International Drive in Orlando. Both of these proposals feature a mixed-use sports and entertainment district as the centerpiece of the development.

Mixed-use developments involving a sports or entertainment focus enhanced by related retail, office and multifamily components have become a staple of new project developments in recent years. There are numerous examples throughout the United States, including The Battery Atlanta, developed around the Atlanta Braves' Truist Park; the Intuit Dome in Los Angeles, home of the Los Angeles Clippers of the National Basketball Association (NBA); and Deer District, anchored by Fiserv Forum, home of the NBA's Milwaukee Bucks. This model has become the preferred structure for bringing new sports/entertainment development online. 
This article provides a framework for developers and other CRE professionals to evaluate and structure investments in mixed-use sports and entertainment districts, with an emphasis on entitlement strategy, capital stack optimization and long-term asset performance.

Benefits

For forward-thinking developers, sports-anchored mixed-use districts offer a powerful platform to unlock new revenue streams, enhance property values and create vibrant year-round destinations. These projects can deliver key benefits, including:

Optimizing Real Estate Beyond Game Day

One of the primary financial advantages of mixed-use developments for sports teams — and a major opportunity for developers — is the ability to monetize real estate assets beyond game-day revenue. By owning and leasing commercial, residential and hospitality spaces, teams and development partners generate consistent income streams. As Milwaukee Bucks President Peter Feigin stated, "We're looking to create a 365-day attraction for Wisconsin residents that will help revitalize downtown Milwaukee."

According to a 2024 report in the Sports Business Journal, The Battery Atlanta became profitable within five years due to its strong mix of retail, office and residential leasing. Business law firm Buchalter helped finance a development on a parcel entitled for multifamily use and sold to a private developer as part of the project's overall master plan.

Teams that retain ownership of surrounding property benefit from appreciating land values, long-term rental income and the ability to capture a share of economic growth driven by their own developments. Developers can capitalize on this momentum by securing entitled real estate, acquiring adjacent real estate and exploring options such as ground leases, profit-sharing agreements or phased-fee development deals in adjacent parcels.

Synergies With Related Uses

Mixed-use districts thrive when they integrate complementary businesses that enhance the fan experience and attract visitors beyond sporting events. Entertainment venues, restaurants, hotels, high-density housing and retail shops create a self-sustaining ecosystem where each component feeds into the success of the others.

Thrive City, an 11-acre mixed-use complex in the district surrounding Chase Center, home to the NBA's Golden State Warriors, is a prime example. Corporate office space, luxury retail and an active events calendar ensure consistent foot traffic year-round, making the district in San Francisco's Mission Bay neighborhood financially viable outside of basketball season. This strategic blending of sports, entertainment and commercial activity creates cross-promotional opportunities and maximizes visitor spending.

For developers, this translates into dependable leasing opportunities and the chance to tailor product offerings to diverse audiences. Reed Cordish, principal at The Cordish Companies, a developer of large-scale urban revitalization projects, emphasized the multifaceted nature of modern entertainment districts: "The most powerful districts, sports-anchored developments, are multiuse at their core. Then you create a best-in-class neighborhood around it, with a hotel and meeting space, office and residential all potentially playing a part."

Ability to Create Tax and Governmental Funding Districts

Many mixed-use developments leverage special tax districts and public financing mechanisms to support infrastructure improvements. These tools, which help offset development costs while ensuring that public investment benefits the broader community, include tax increment financing (TIF), infrastructure bonds and opportunity zones.

Ballpark Village, a retail and entertainment district located across the street from Busch Stadium, home of MLB's St. Louis Cardinals, successfully used $65 million in tax credits and public incentives, attracting $585 million in private investment. When structured effectively, these funding models allow teams to secure public support for infrastructure (roads, utilities, transit) while retaining control over revenue-generating assets.

Such projects aren't exclusive to major cities or municipalities. In Wichita, Kansas, EPC Real Estate Group is spearheading a $110 million mixed-use development adjacent to Equity Bank Park (formerly Riverfront Stadium), home to the Wichita Wind Surge, a Minor League Baseball affiliate of the Minnesota Twins. The project encompasses an eight-story hotel, luxury apartments, retail spaces and a public parking garage, all designed to integrate seamlessly with the ballpark experience. The development aims to revitalize the Delano neighborhood and the Arkansas River corridor by transforming the area into a sports-anchored urban district. The city of Wichita facilitated this initiative through public-private partnerships, leveraging sales tax and revenue (STAR) bonds and TIF to support the project's infrastructure and economic viability.

Developers familiar with these funding models are well positioned to structure creative capital stacks and take advantage of incentives provided by governmental entities in connection with the development of sports and entertainment-anchored project areas.

Revitalization of Older Neighborhoods

Stadium-centered mixed-use developments have been instrumental in revitalizing aging urban areas, transforming underutilized land into vibrant entertainment districts. By anchoring redevelopment efforts around a high-profile venue, these projects spur economic activity, increase property values and attract new businesses. Heightened property values, together with public investment in infrastructure, support the development of new projects in areas that were once economically disadvantaged.

The Battery Atlanta turned a former industrial area into a high-demand commercial hub. Property values in and around the project increased from $5 million in 2014 to $736 million in 2022, according to an annual report. In addition, the stadium and development pumped $38 million in tax revenue into the county, state and school district in 2022, with $9.4 million going to the Cobb County Board of Education.

The proposed Power District in Salt Lake City is another example of a mixed-use sports and entertainment district that promises to transform an older industrial area, bringing dramatic increases to community resources and creating diverse economic drivers within the area.

Developers can play a central role in planning and executing these broader revitalization efforts by taking on roles as master developers or aligning with civic goals through community benefits agreements.

Challenges

While sports-anchored mixed-use districts offer significant opportunities, they also come with unique complexities. Developers should be mindful of several key challenges that can impact project success and long-term viability:

Infrastructure Costs

Adding a major sports/entertainment district with ancillary uses to a previously undeveloped area necessarily involves substantial upgrades to surrounding public infrastructure. This includes major road and public transportation upgrades, water and sewer upgrades, and power capacity and service upgrades. Doing this typically involves state agencies (e.g., for changes and upgrades to freeway, rail and other public transportation), county and city governments (e.g., for changes to local roads, water and sewer districts), and quasi-governmental agencies (e.g., power companies with respect to gas and electrical capacity and service). Many of these processes are multiyear undertakings that may involve public initiatives such as tax increases, the creation of improvement districts, and public or quasi-public bonding.

In addition, a major sports/entertainment district typically requires substantial investment in the creation of parking facilities. Parking is a challenge to incorporate into any major development project. Surface parking, while the most economical type of parking to develop, also uses the most land — most of which could likely serve a better ancillary use. Structured parking is the better choice from a synergistic and operational standpoint, but these facilities are traditionally expensive to build and offer limited income potential. As a result, public participation may be required to make a major project feasible. The Battery Atlanta's model of assigning maintenance responsibilities to a private development authority has proved effective, whereas other projects that have relied on municipal upkeep have sometimes faced funding shortfalls that led to declining conditions over time.

It is not uncommon to form a master parking construct whereby related private and commercial projects (such as a multifamily project and a sports and entertainment project, respectively)  parking facilities that serve the entire development while sharing the costs in a way that makes the construction of such facilities economically feasible.

The Entitlement Process

The entitlement process, including rezoning approvals and land acquisition, can be one of the most time-consuming and contentious aspects of a mixed-use development. Developers often face resistance from existing property owners, requiring complex parcel assemblages to secure the necessary land for a cohesive district. The Battery Atlanta, for instance, had to navigate zoning variances to allow for a mix of residential, commercial and entertainment uses, while The District Detroit has struggled with stalled land acquisitions, slowing its overall progress.

Navigating these regulatory hurdles requires strong municipal partnerships and legal expertise to ensure a smooth approval process. Private developers who become part of these projects can often use the political excitement created by proposed sports and entertainment districts to obtain entitlements for associated private developments such as multifamily or ancillary mixed use. 

Financial Feasibility of Development

Rising construction costs, high interest rates and uncertain economic conditions make financing mixed-use developments increasingly difficult. Developers often depend on high-density housing within mixed-use developments to maintain profitability. However, current economic conditions in the multifamily sector have not been strong enough to sustain mixed-use projects at the scale traditionally seen.

While projects like The Battery Atlanta have proved successful, others, such as The District Detroit, have faced delays due to economic downturns and shifting investor confidence. Developers must carefully balance private capital, public incentives and projected revenue streams to ensure financial viability. The shift toward private funding, as seen with SoFi Stadium and Chase Center, has proved to be more sustainable in the long run, as these projects avoid reliance on uncertain public subsidies.

Action Items for Developers

To capture opportunities in mixed-use sports and entertainment districts, developers should start by identifying municipalities that are actively pursuing or supporting stadium redevelopment efforts. This involves monitoring city council agendas, sports franchise relocation rumors and economic development incentives. Early engagement with both municipal planners and team ownership groups can position a developer as a strategic partner, particularly if the developer has experience with complex entitlements, master planning or public-private financing.

Developers can also conduct site control and entitlement feasibility assessments in the area around a proposed or existing stadium. This includes mapping parcels, identifying underutilized properties and analyzing zoning overlays or redevelopment district potential. By assembling key parcels or forming joint venture agreements with local landowners, developers can secure a first-mover advantage and increase leverage in broader master-planning efforts.

Finally, prepare a phased financial model that accounts for stadium adjacency, anchor tenant risk and infrastructure contributions. Secure letters of interest from retail or hospitality tenants, and work with public partners to explore TIF, special assessment districts and federal programs like opportunity zones. The most successful developments combine a proactive entitlement strategy with flexible capital stacks and phased delivery, ensuring both financial viability and long-term upside.

A Growing Appreciation for Real Estate Expertise

When billionaire Mark Cuban sold his majority stake in the NBA s Dallas Mavericks in 2023, he cited the need for owners of modern sports franchises to possess expertise in real estate development — a skill he said he lacked.

The integration of entertainment and community development that is evident in modern mixed-use sports and entertainment districts is a valuable prize for any city. Putting a successful district together involves opportunity, timing, funding, marketing, land availability, legal complexity and navigation of community politics. As a result, it takes a team of entrepreneurs, sports professionals, CRE professionals, community leaders, and business, tax and legal partners to bring a vision to reality. When such a dream is realized, however, cities and their residents will see revenue skyrocket; local businesses large and small will experience substantial growth; and the quality of life for individuals living in and around the development will dramatically improve as retail, entertainment and community involvement become more accessible than ever before. n

Keven Rowe is a shareholder in Buchalter's Salt Lake City office and a member of the business law firm's real estate practice group. Spencer Hafen is an attorney in Buchalter's Salt Lake City office. Chris Rowe is a development associate at Scratch Development in Utah.

As of May, plans were underway to renovate or build at least 39 major sports venues throughout North America, according to sports agency Klutch Sports Group. Wall Street Journal reporter Rebecca Picciotto cited the number in her article "Cities Turn to Sports Stadiums to Snap Out of Downtown Doom Loop."

• Magazine Article
• Business/Trends
• Multifamily Property
• Mixed Use
• Office
• Parking
• Retail
• Sports and Entertainment District (SED)