Strategic Property Partners (SPP) is a real estate development firm created by Tampa Bay Lightning owner Jeff Vinik and Cascade Investment to oversee the $4 billion redevelopment of Water Street and other areas near and around Amalie Arena. SPP has created a core team, networks, systems, and processes through the Water Street project, which has at least five more years to run. The company has taken on unrelated projects, starting with the construction of a Four Seasons hotel in Charleston, S.C. More sports owners and teams are launching separate businesses to control their real estate development efforts, enabling them to keep their real estate holdings and financial success firewalled from league revenue sharing or collective-bargaining agreements.
As mentioned in Sports Business Journal, sports teams are increasingly launching separate businesses to control their real estate development efforts. This trend allows teams to keep their real estate holdings and any financial success separate from league revenue sharing or collective-bargaining agreements.
One example of this trend is the innocuously named Strategic Property Partners (SPP) real estate development firm in Tampa. SPP is a 50-50 joint venture between Tampa Bay Lightning owner Jeff Vinik and Cascade Investment, the private investment arm of Microsoft co-founder Bill Gates. The company was created to oversee the $4 billion redevelopment of more than 9.5 million square feet of Water Street and other areas near and around Amalie Arena, where Vinik’s Lightning play hockey.
Through the Water Street project, the 40-employee SPP created a core team, networks, systems, and processes, as one employee explained. So, while the Water Street work has at least five more years to run, it made sense for SPP to take on unrelated projects, starting with the construction of a Four Seasons hotel in Charleston, S.C.
For teams or entities focused on one or a handful of developments, a stand-alone business increasingly makes sense, and not just for sports owners with real estate backgrounds, such as AEG or Kroenke Sports & Entertainment. The Atlanta Braves offer a successful blueprint. They formed Braves Development Co. to oversee The Battery Atlanta, the 60-acre development surrounding Truist Park. BDC, which sits alongside Atlanta Braves Baseball under the Braves Holdings umbrella corporation (which is owned by publicly traded parent company, Liberty Media), has 17 full-time employees but uses the baseball side’s help, including the sponsorship sales team. BDC uses third-party property managers and leasing agents.
Erin Talkington, who oversees real estate consultancy RCLCO’s sports practice and is working on mixed-use projects with the Tampa Bay Rays and the Metro Nashville-Tennessee Titans project, says, “You need to have the capital and the risk tolerance to do it yourself.” However, for teams that do have the capital and risk tolerance, owning and controlling their real estate development efforts can provide long-term benefits and financial success.
As the sports industry grows savvier about mixed-use development and more interested in the long-term benefits of owning real estate around stadiums and arenas, owners and teams that in the past would have relied on real estate development partners are increasingly thinking about launching separate businesses to control their efforts.
As the ultimate outcome, the trend of sports teams launching separate businesses to control their real estate development efforts is gaining momentum. This trend allows teams to keep their real estate holdings separate from league revenue sharing or collective-bargaining agreements and can provide long-term benefits and financial success. The success of Strategic Property Partners and Braves Development Co. offer blueprints for other teams interested in this trend.
