What the Most Expensive Stadium Deal in History Could Mean for Commercial Real Estate in Inglewood.
The $2.6B future Inglewood NFL stadium is set to open in 2020 will be the world’s largest and most expensive football stadium to date and is set to host the 2022 Super Bowl.
The 80,000 seat stadium will be the future home of the Los Angeles Rams and Chargers football team. The stadium will be set within Hollywood Park, a 300-acre project that features a retail and entertainment district, offering visitors a variety of shopping, dining, recreation and entertainment options. The park will also be complemented by luxury apartments, office campuses, and an upscale, lakefront hotel.
Not long ago, Inglewood’s prospects looked bleak. With the city and the school district both on the verge of bankruptcy. Now, as it becomes the home of the new NFL stadium, Inglewood is on an upward trajectory and is expected to undergo a wave of positive economic change.
The mixed-use development has yet to be complete and has had construction delays due to record rainfalls, yet there is continuous buzz over the project in both the sports and commercial real estate worlds.
The new stadium is drawing developers to invest in the surrounding area, drawing in proposals for more development in the periphery. The complex is the latest and grandest development in the city which is due to directly affect the real estate market and push up rental prices.
Inglewood is already experiencing a rise in property values due to the new commercial entertainment hub. According to realtor.com, the median listing price for a home in Inglewood jumped from $398,000 in 2016, when the Ram’s move to Inglewood became official, to $448,000 in 2017. Property values are expected to continue to rise with the opening of the stadium and surrounding attractions.
In response to the new development, Trulia published its own research, specifically analyzing the value of real estate and comparable rents within a 2-mile radius of 31 already existing NFL stadiums.
The research reveals that of the 31 neighborhoods that surround the respective NFL stadiums, roughly two-thirds maintain higher housing values than houses in non-stadium neighborhoods.
Inglewood property values have historically lagged behind the region by about 8.9%, but the area is looking to quickly catch up as the plan to build commercial and retail space surrounding the stadium will be transformative to the neighborhood.
The Ram’s stadium is unique in that it is being financed privately, not publicly like other stadiums. Inglewood residents will not be burdened with taxes to cover stadium construction.
On average, cities contribute roughly 57% of the cost of building the stadium, because they want the new development. Cities end up wanting to pay as little as possible, resulting in compromises to the development’s design and planning.
Stan Kroenke, the Rams owner, is the stadium’s main investor and intends to entirely finance and build the development. This will cause the city economic benefits without having to pay hundreds of millions of dollars in taxpayer money, which has been the case with many new stadiums.
According to an agreement between the city and developers, once the stadium generates $25 million in tax revenue, the city plans to reimburse developers for costs such as road work, utility work, and public parks.