Tag Archives: land value

NFL teams leave cities for suburbs in search of more revenue and tax dollars

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NFL teams keep their city names and go to the suburbs for more money:

Photo by Chris K on Pexels.com

The Arlington Cowboys. East Rutherford Giants and Jets. Inglewood Rams and Chargers. And maybe the Hammond Bears.

Ten NFL teams don’t play in their namesake cities but in their suburbs. If the Chicago Bears go through with one of their proposals for a new stadium — Illinois Gov. JB Pritzker acknowledged Friday that the team’s next home is unlikely to rise within Chicago’s city limits — they could wind up in northwest suburban Arlington Heights or just across the Indiana border in Hammond.

But like other NFL teams, they have trademarked their name and would retain their city identity — along with their Chicago “C” and Bears head logos…

The move outside cities, analysts say, is driven largely by the desire for more money from new stadium revenues on larger, cheaper tracts of land, often closer to many season ticket holders, where teams can build surrounding entertainment districts with restaurants, hotels, retail and housing.

This is a classic suburban story: land outside the city is cheaper so a buyer can get more bang for their buck. This is the story often told about single-family homes: take the same home and lot and see the price to build it and buy it drop as you move out from the city through closer suburbs to outer suburbs.

With so much activity in the suburbs already, it is not like a new stadium is isolated. There are plenty of fans and businesses nearby. Americans are used to suburb-to-suburb commutes. The land that is cheaper in the suburbs can then appreciate in value and provide a big return for the football team.

And if suburban communities are willing to offer big tax breaks, this can generate even more revenue for the football teams. There can be a local or national bidding war where suburbs provide extra incentives beyond having cheaper land compared to cities.

Is there a strong counterargument for a football team to stay in a big city? Should they be loyal to the city? Can there land be even more valuable in the long run because of the demand for land in cities? At the moment, the primary thing cities might offer are big tax breaks.

People might get extra interested in these cases as football teams operate in the public eye and can bring together people across a region. But aren’t the teams just acting like all the other businesses that move locations, including going to the suburbs, so they can make more money?

Growing interest in the investment potential of farmland

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With people looking for good investments, farmland is getting some attention:

Just how hot is American farmland? By some accounts the value of farmland is up 20% this year alone. That’s better than stocks or gold. During the past two decades, owning farmland would have produced an annual return of nearly 11%, according to Hancock Agricultural Investment Group. And that covers a time period when tech stocks boomed and crashed, and housing boomed and crashed. So at a time when investors are still looking for safety, farmland is becoming the “it” investment.

The article goes on to say that because food demand is up, particularly for corn, and crop yields are up because of improved technology. At the same time, perhaps there is a market bubble going on here and it is difficult to get into the business of owning farmland.

I find it interesting that there is no mention of land development in all of this. In areas of sprawl, farmers can benefit from skyrocketing land prices as developers and builders look to acquire buildable acreage. But this story seems to be talking mainly about farm land in the middle of country, not farmland on the booming southwest edge of the Chicago region. In the long term, is farmland more valuable because of the commodity values (which can fluctuate) or because it can eventually be sold for other profitable uses?

Perhaps this all works because it is difficult to envision too much more American land becoming farmland – the total number of cropland (and farmland and pasture) acres has dropped from over 445 million acres in 1997 to over 406 million acres in 2007. If food demand is continually strong and there is a somewhat fixed number of acres that can be farmed, perhaps this is indeed valuable land.