What used to be a parking lot between Ugly’s and The Loaded Slate has now been transformed into a beer garden at the entrance to the new Fiserv Forum on Old World 3^rd Street.

During their first visit to the Fiserv Forum, Courtney Schultz and Lydia Witte walked around the Christkindlmarket in front of the Fiserv Forum on a chilly winter night just minutes before the Milwaukee Bucks and Detroit Pistons tipped off.

Schultz was surprised by the transformation of the space in front of the arena.  “I wasn’t expecting this beautifully paved area, the beer garden and the future Good City Brewing building,” said Schultz.

<figure class="aligncenter"><figcaption>This is the first year that the Fiserv Forum is hosting the Christkindlmarket, one of many events held in front of the new arena. Photo: Sam Schmitz</figcaption></figure>

“We’re not even here for the [Bucks] game. We’re here for the Christkindlmarket,” said Witte.

Bars and restaurants on Old World Third Street were in for a surprise once news broke back in June 2016 about the Milwaukee Bucks constructing what would become the Fiserv Forum.

Since the opening of the new arena in late August, these bars and restaurants have gotten their first taste of how the Bucks’ new home will impact their businesses.

The first concerts and events have so far resulted in an increase in foot traffic, and in food and liquor sales.

Rob Settecase has been the owner of Ugly’s since it opened in 2013.  He says that the 17,000-person capacity of the Fiserv Forum alone will impact Ugly’s.  “If we get less than 10 percent of a crowd for a concert or Bucks game, that’s around 500 people and we can’t even handle that,” says Settecase.  “I knew our dinner service would be slammed just because of the math.” 

In spite of the optimism, research shows that new arenas in other cities usually provide little to no economic impact on surrounding businesses.

According to a study done in 2000 by Andrew Zimbalist and John Siegfried, sports teams in cities like St. Louis account for less than 0.3 percent of local economic activity.  For a large city likeNew York, a baseball team contributes less than 0.03 percent of economic output.

This lack of impact is due to what Zimbalist and Siegfried call “the substitution effect.”

“The money one spends taking a family to a game typically is money that is not spent at a local bowling alley, golf course, restaurant, or theater,” wrote the authors. “The net effect in the metropolitan area then is zero, or very close to zero.”

Zimbalist and Siegfried found that sports teams may rearrange the spending and economic activity, but they’re unlikely to add much to it.

Another study by Dennis Coates and Brad R. Humphreys in 2004 was focused on Washington D.C. and the economic impact of the local baseball team.

“Fans will bring their entertainment spending from the suburbs into the district -unless, of course, they would have frequented D.C. restaurants, bars, nightclubs, parking lots, and other businesses even without a baseball team in D.C.,” the authors wrote.

Coates and Humphreys suggest that there could be small exceptions to the research, though. They say certain areas around the stadium could benefit.

Griffin Myers did a study in 2017 that explains how certain businesses that are within the vicinity of a new arena can have some success.  

“Most cities that saw positive influences of sports stadiums were located in their city’s central business district,” wrote Myers. “The cities that see the most economic benefits… usually have stadiums located in heavily commercialized areas that consumers can patronize before or after games.”

Myers also says that basketball arenas tend to offer the best opportunity for positive economic effects because they can be used year round. Although the numbers suggest that the Fiserv Forum may provide little to no economic impact on these surrounding bars and restaurants, owners and managers tend to disagree with the research.

<figure class="aligncenter"><figcaption>Donovan Romo, manager at Carson’s Prime Steaks & Famous Barbecue Milwaukee.  Photo: Sam Schmitz</figcaption></figure>

Donovan Romo has been managing Carson’s Prime Steaks and Famous Barbeque for more than a year.

Even before the new arena was built, Romo says Bucks games were good for business at Carson’s since the Bradley Center was the focal point of the area.

“Now that the arena is a block closer, it’s been pretty good for us when there are events just because people want something that’s closer [to the arena] with the cold weather approaching,” Romo says.