Quicken Loans Arena in Cleveland will get a new glass-enclosed entrance as part of a $140 million project. (Courtesy Quicken Loans Arena)
Around the world, arenas continue to be developed and redeveloped with an emphasis on their place in their larger communities. Rather than being staged as isolated bowls in vast parking lots, arenas are situated as part of mixed-use projects with offices, retail outlets, restaurants, hotels, public spaces and more, anchoring new neighborhoods that prove transformative. The trend shows no sign of slowing, says Jon Niemuth, director of AECOM Sports, Americas.
“The biggest trend is less about the venue specifically and more about the ways the projects (the few remaining ‘ground up’ ones) are being developed,” Niemuth says. “The idea that the arena is part of a larger district which incorporates discreet program components which were once more emphasized internal to the venue is a visible trend.”
The broadening role of arenas in their communities is only one of several influential trends reshaping the field and directing the work of the professionals that oversee arena development, management and refurbishment. Inside, arenas are changing to accommodate the rapidly changing preferences and habits of the audiences who fill them.
“The hospitality industry constantly reinvents itself to remain relevant to its customer base,” says Don Barnum, group global sports leader at DLR. “Similarly, the event industry must refresh their venues every few years to introduce new themes, viewing and entertainment options, and offerings that enhance the fan experience.”
Venue veterans explain some of the key trends affecting the arena industry.
PREMIUM SEATING MIXES
Seating in arenas continues to reflect an increasing diversity of premium seating products, particularly in larger arenas such as NBA venues, says Gerardo Prado, sports practice leader and vice president at HNTB.
“You will start to see more renovations where depressed seating inventory (general seats) are being replaced with premium seating products, more club/social areas, with diverse vantage points,” Prado says. “For the professional model, similar to stadiums, there is a primary focus on revenue-generation to increase profits but also provide a better fan experience to a wider demographic. The days of simply having suites, club seats, and courtside seats are gone. We have social zones with loge seating, upscale seating, etc. with dedicated club lounge spaces and/or social gathering areas.”
Barnum says the key to maximizing revenue for seating inventory is identifying the best mix of inventory for each program and market -- there is no one-size-fits-all strategic solution.
“Suites are becoming less popular due to tax laws and corporate appetite and are being replaced by club and other social-type spaces that allow a larger demographic to buy a premium experience at a lower price point,” Barnum says. “As far as real estate within an arena, suites and clubs are interchangeable. A suite level can be easily transformed into a club area, and vice versa if industry demand changes course. Loge boxes are also gaining popularity and provide spectators with a small designated space to view the game with access to a larger shared lounge area. To provide the appropriate mix of premium options, owners must examine the demographics specific to their marketplace.”
Prado says the right premium seating strategy can accommodate revenue opportunities when no major events are scheduled.
“To further drive revenue, HNTB has taken an approach to designing slightly larger, flexible club lounge spaces to allow the arenas and stadiums to not only be utilized on game day, but rented out for a variety of events,” Prado says. “Providing higher square foot per patron allocations within club lounge areas, beyond the code minimums, provides owners with much more flexibility in the utilization of space and allows them to turn the areas into a 365-day-a-year operation.”
Barnum said arena operators also are looking for more ways to give fans closer access to performers and athletes.
“In most professional and collegiate basketball arenas, fans can purchase seats where their feet are actually on the hardwood,” Barnum says. “With this close proximity, fans can high five and fist bump their favorite players before, during, and after the game. Other venues are adding event-level lounge spaces where teams pass through from the locker room to the court, which is another level of fan engagement that can also increase revenue-generating opportunities for teams and venue owners.”
SOCIAL SPACES
In key ways, social spaces that give fans a diversity of options for ways to experience an event continue to define the design of arenas on the inside.
“It’s all about dwell time now,” says Michael Rowe, CEO of Anthony James Partners, which serves as an owner’s representative and provides AV design and consulting. “They want you to come and spend the day at the facility. They want you to come before the event happens and they want you to stay well after the event is over. … They want you to be able to access clubs and activities on non-event days and non-event times.”
Dickies Arena is scheduled to open in Fort Worth, Texas, in fall 2019. (Courtesy Dickies Arena)
Barnum says more arena owners are removing seats to allow for the creation of social spaces, sacrificing the potential seat revenue for the development of a relaxed setting -- reducing capacity to add new environments. Barnum compares the arena industry’s recent steps to entertain fans in myriad ways to the way minor league baseball for decades has treated fans to a varied spectacle that prizes promotions and interactions rather than relegating fans to passive spectators.
“Facility owners recognize that people no longer want to sit and watch an entire game from their assigned seat,” Barnum says. “They want to be able to move around the arena, charge their phone, interact with their friends, or even catch another game on a big screen at a lounge or bar area.”
Michael Holleman, leader of the sports design studio for CBRE | Heery, said the college landscape has seen changes in the way venues fit into the larger college campus atmosphere throughout the year. Just as professional arenas are becoming more integrated into their neighborhoods, college venues are becoming less isolated from everyday student life, he said. Flexible social spaces are key.
“College sports arenas offer vast opportunities for the institutions to utilize the venue space year-round. For example, new designs are transforming arena concessions into year-round food courts. In the offseason, a concourse can be transformed into a student lounge and club suites adjusted to accommodate conferences and meetings.”
CONSTRUCTION AND COSTS
A host of trends are affecting the construction process and altering the way arenas are funded and priced — and therefore built.
For instance, Prado says that news reports are beginning to suggest that the impact of tariffs on some imported construction materials, such as steel, could lead to spikes in costs and increases in budgets.
“Since structural steel is common on large span structures for roofs, building structural systems, etc., the new tariffs will likely increase project budgets and/or demand more functional, efficient buildings and/or smaller buildings that have aggressive budgets,” Prado said.
Prado said that he is “worried that with the increases in construction costs and operations costs, clients will be forced to make compromises on the overall size of projects (less square footage), possibly compromising on the overall quality and operational functionality of the venue. With the demands imposed to improve the live fan experience, it requires more diverse seating offerings, larger concourses, better amenities. This, in turn, impacts and increases square footage and the areas most impacted are the back-of-house areas, which are necessary for the proper operation and maintenance of the facility.”
On the finance side, Niemuth said “the erosion of public subsidy across all spectrums combined with an increasing amount of either clients and/or team ownership with the financial ability to deliver their own projects independent of traditional public underwriting will transform the attitude towards venues in the largest way.”
“A heightened focus on financial sustainability which directly translates into a different attitude towards building size, complexity, etc., will change the model for which designers create buildings,” Niemuth said. “This new approach puts specific focus on relationship of function, revenue generation, and operations to a degree not seen in previous generations of venue development. The natural introduction of more [public-private partnership]-focused project models and associated delivery models allow for adoption of similarly more efficient and effective finance and program management models.”
“We see the trend towards more frequent transformations and ongoing improvements to projects to keep either venue component parts or specific experiences fresh and aligned to market trends of the moment,” Niemuth said. “We continue to explore how a supposed shorter phase approach to refreshing a building will impact new construction and project finance.”