Texas Border Business
Bert Ogden Arena – A business model for prosperity
By Roberto Hugo Gonzalez
H-E-B Park is an important factor directly correlated with the increased number of visitors to the area, but so is the highly anticipated Bert Ogden Arena, which is also expected to draw thousands more guests and provide an economic stimulus for Edinburg and the region.
The University of Texas Rio Grande Valley, through its Research, Innovation, and Economic Development office, released today the study that shows that the Capital Investment of $88 million for the construction arena with 8,500 seats, will create 150 jobs for the local economy.
According to the study, the economic impact analysis estimates the overall impact of the Arena would have on the local economy. The construction and operation of the Arena will impact the economy through: 1) spending to construct the Arena (construction expenditures) 2) Jobs Created due to the opening of Arena and 3) Spending by attendees for lodging, eating, ticket sales etc., at the arena and businesses in and around city of Edinburg. These impacts were added to get the total economic impact the Arena would have on the local economy.
The long awaited Bert Ogden Arena will serve as home to the NBA G League Rio Grande Valley Vipers but will host a variety of sporting events and concerts which will bring thousands of visitors to Edinburg.
The vision behind to create the largest indoor arena in the RGV originated from the idea of first to bring an investment to Edinburg, which will also benefit the region. I addition makes a genuine investment in human infrastructure and adds to the quality of life for local residents. Below, the study results.
Economic Impact—Construction Expenditures, Arena
- The construction cost for the stadium is $88 million. This cost includes construction labor, materials, furniture, equipment, signage, design, engineering, legal, accounting, and other costs. Arena construction expenditures will create 1,555 jobs, the majority of which are in construction industry, and generate $43.9 million in labor income, $62 million in value added, and $138.7 million in economic output. Stadium construction impacts are temporary impacts that would occur during the construction period only. See Table 1.
- Table 1. Economic Impact–Construction Expenditures, Arena
| Impact Type | Employment | Labor Income | Value Added | Output |
| Direct Effect | 1,113 | $28,964,300 | $33,186,009 | $88,000,000 |
| Indirect Effect | 184 | $6,642,485 | $11,848,832 | $22,659,063 |
| Induced Effect | 257 | $8,368,565 | $17,068,307 | $28,075,983 |
| Total Effect | 1,555 | $43,975,350 | $62,103,147 | $138,735,046 |
Economic Impact—Jobs, Arena
- Based on the estimated 150 jobs that will be created due to the Arena in the region will create 213 jobs, and generate $3.7 million in labor income, $7.3 million in value added, and $15.6 million in economic output. The job impacts would begin once construction is complete and the stadium is open for events and would recur every year thereafter. See Table 2.
- Table 2. Economic Impact–Jobs, Arena + Hotel + Pad Sites
| Impact Type | Employment | Labor Income | Value Added | Output |
| Direct Effect | 150 | $2,029,963 | $3,861,006 | $9,377,148 |
| Indirect Effect | 41 | $1,045,000 | $2,041,766 | $3,875,720 |
| Induced Effect | 22 | $719,818 | $1,468,934 | $2,416,021 |
| Total Effect | 213 | $3,794,781 | $7,371,706 | $15,668,889 |
Economic Impact—Attendee Spending, Arena
Using attendee data and average expenditure data of Texas visitors from Texas Destinations 2014, DISC calculated the estimated amount of spending by the attendees. Based on these estimates, attendee spending is estimated at $52.2 million.
Assuming 72 events with 5000 attendees for each event will equal 360,000, who will enjoy the newly constructed Arena. Assuming 80 percent of the attendees are local residents and 20 percent (72,000) from outside the town. See Table 3
Table 3. Annual Attendee Spending, Arena
| Ticket Sales | $5,400,000 |
| Hotels | $8,712,000 |
| Transportation | $16,560,000 |
| Food | $10,512,000 |
| Shopping | $6,228,000 |
| Entertainment | $3,636,000 |
| Miscellaneous | $1,224,000 |
| Total | $52,272,000 |
Source: DISC estimates, Texas Destinations 2014 report, Arena Estimates
- The Attendee expenditures of $52.2 million will create 1,005 jobs and generate $24.8 million in labor income, $42 million in value added, and $76 million in economic output. See Table 4.
- Table 4. Economic Impact– Attendee Spending, Arena
| Impact Type | Employment | Labor Income | Value Added | Output |
| Direct Effect | 761 | $16,802,617 | $26,038,772 | $47,635,056 |
| Indirect Effect | 111 | $3,307,594 | $6,574,833 | $12,403,604 |
| Induced Effect | 133 | $4,696,364 | $9,583,937 | $16,251,257 |
| Total Effect | 1,005 | $24,806,575 | $42,197,542 | $76,289,917 |
Economic Impact—Total Expenditures, Including Construction
- The economic impacts from construction expenditures, Jobs created, and Attendee Spending were added to get the total economic impact of the project. The project will create 2,773 jobs and generate $10.3 million in local and state taxes, $72 million in labor income, $111 million in value added, and $230 million in economic impact. See Table 5.
- Table 5. Total Economic Impact, Including Construction
| Impact Type | Employment | Labor Income | Value Added | Output |
| Direct Effect | 2,024 | 47,796,879 | 63,085,787 | 145,012,207 |
| Indirect Effect | 336 | 10,995,079 | 20,465,431 | 38,938,387 |
| Induced Effect | 412 | 13,784,747 | 28,121,178 | 46,743,261 |
| Total Effect | 2,773 | 72,576,706 | 111,672,395 | 230,693,855 |
| Local and State Tax | $10,384,692 | |||
The construction of this multipurpose sports and entertainment complex was made possible in part by a public/private partnership between the visionaries at Cantu Construction and the unwavering support from the City of Edinburg and Edinburg Economic Development Corporation.
Upon breaking ground, the 8500-seat venue created hundreds of jobs to local service providers working tirelessly to move the project forward.
A previous study conducted by the University Of Texas Rio Grande Valley projected a $90 million immediate economic impact with the new facility and $45 million impact each year after.
Overall, in its first year alone, the arena is expected to provide substantial return on investment to the City of Edinburg.
The arena will not only be a destination for sporting events, but also host national and international musical acts, graduations, civic functions which will stimulate the local economy and strengthen community partnership.
Through the development process, it has been essential the partnership with the City of Edinburg and Edinburg EDC will work to meet the goals of the arena project and of the city.
There is already an excitement surrounding the future of Bert Ogden Arena and the opportunity to continue its collaboration with the City of Edinburg and community.
Arena officials remain optimistic that this facility will help spur commercial development — especially hotels and eateries — in the developing area along Interstate 69, where the arena sits.
The projected economic impact that this project will have on the community is phenomenal and will rely on great planning, work vision, but above all on the partnership that sparked the creation of the project.
Aside from becoming an entertainment destination, it has already transformed the Edinburg community, with amenities that will greatly enhance its status as a regional attraction for young athletes and their families.
