Has the San Jose Arena (HP Pavilion) "Rebuilt San Jose"? No.

I got lucky and was able to go to the Sharks game on Saturday night. It reminded me of an email I received from someone saying that the Sharks Arena (HP Pavilion) has ‘rebuilt San Jose’. I’ve heard this argument before from others trying to argue that sports arenas can be catalysts for economic growth. Based on numerous economic studies that I’ve read, I don’t believe that to be true in general. In any event, the San Jose Arena does not provide evidence of this.

The Arena was built in 1993, seventeen years ago. The area immediately around the arena was rather depressed. It is largely industrial with some housing nearby on St. John. The area was hit with flooding of the Guadalupe River in the nineties. Many of the homes on St. John, within a couple of blocks of the arena, are still boarded up. Below is a shot of Autumn St. from Google Maps looking towards the Arena (seen in the background to the left). This is typical of this industrial land uses in this area.

Autumn St. south of the San Jose Arena

Here’s a shot from right behind the Arena. Where are the restaurants and bars?

Autumn St. south of the San Jose Arena

You can see from Google Maps that there is no street within a few blocks of the Arena that has any new restaurants or bars. I challenge anyone to list new businesses that have cropped up near the Arena since it was built. You can also see that the main land use that something like the Arena generates is parking.

Autumn St. south of the San Jose Arena

The Arena has been given credit for helping some of the businesses in downtown San Jose which is several blocks away. That is true. However, the Arena would not support these restaurants on its own. If you think about it, the Sharks gives a restaurant owner at most one or two shifts of patrons for about 45 days a year. There are another 320 days of the year. The Tied House in downtown San Jose was one of the Sharks fans favorite restaurants. It is no longer open. Without the existing downtown, these restaurants wouldn’t stand a chance. We don’t have a downtown in Fremont.

Downtown San Jose existed long before the Arena was built. Companies like Adobe located in downtown San Jose because of the talent pool in Silicon Valley not because of the Sharks. Silicon Valley is a success story that would have happened with or without the Arena. There are many studies that consistently show that sports facilities are not economic generators. There are also many stories where municipal agencies have ended up overpaying for their share of the facility (i.e. the Oakland Raiders return to Alameda County).

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2 comments on “Has the San Jose Arena (HP Pavilion) "Rebuilt San Jose"? No.”

  1. admin Reply

    Yes, an existing urban area can support a ballpark or arena. I was not saying that San Jose can’t support a ballpark. You are right about the downtown needing to come before the ballpark. There has never been an instance where a ballpark has led to significant economic development, let alone a downtown area.

    The point I was making was that a facility like the arena, which has tons of events besides just the Sharks, has not lead to nearby economic development to any degree. If you don’t believe me, just walk around that area. You won’t see anything until you walk the few blocks over to the existing downtown area.

    There is actually interesting research about the effects of strikes on a regions local economy. The bottom line was that the strike led to no economic impact:

    “These results refute the idea that attracting professional sports franchises represents a viable economic development strategy.”

    http://www.entrepreneur.com/tradejournals/article/70463176.html

  2. Bill Spicer Reply

    I somewhat disagree. When you have a large urban area (San Jose) it will support a arena and stadium, downtown. a good example is At&T Park in San Francisco is very popular and the whole area benefits from AT&T Park.
    When the San Jose Sharks went on strike for a prolonged period of time, the shop keepers complained as well as the resturants and bars.

    This would not work in Fremont. We do not have a downtown, We do not have good resturants or places of entertainment and dancing.
    Some people think that Fremont is the most boring city in the Bay Area!

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