What Will LeBron James’ Departure Mean For Cleveland’s Economy?

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LeBron James announced earlier this week he’s leaving his hometown Cleveland Cavaliers for the second time, looking for greener pastures with the 16-time NBA champion L.A. Lakers.

In 2010, James’ first departure for Miami shook both Cleveland’s economy and its psyche, but some Clevelanders have more hope for their city this time around.

East 4th Street

Nick Kostis has been doing business in Cleveland for more than 40 years.

He’s spent 16 of those years as the managing partner of Pickwick and Frolic, a restaurant and comedy club downtown, and although he’s a proud Brooklyn, New York, native, Kostis said Cleveland has become his home and the Cavs his team.

“Who isn’t a Cavs fan?” Kostis laughed.

Pickwick and Frolic is located on Cleveland’s East 4th street.

It’s a pedestrian street about three blocks from Quicken Loans Arena lined with bars and restaurants-- bars and restaurants that Kostis said are packed when the Cavs are in town. Even on the harshest winter nights.

But this coming winter, Kostis fears those unforgiving conditions may get the better of him now that James is headed to the west coast.

Kostis said he knows his business, as well as those around it, will take a hit.

“The hotels will feel it, the restaurants will feel it, employment will be affected because there won’t be as many places to work as many hours,” he said, “because on a snowy night, the Quicken Loans Arena was still full.”

Impacts on the Local Economy

Stan Veuger, with the D.C. think tank the American Enterprise Institute, said, unfortunately, Kostis’ worries are likely to come true.

He studied James’ impact on the hospitality industry in Cleveland when the basketball star returned to the Cavs in 2014.

“Within a mile of the stadium, you see a big uptick in the number of establishments and a big uptick in employment at those establishments,” Veuger explained.

The number of eating and drinking establishments within that mile increased by nearly 14 percent, and the number of workers in those establishments by nearly 24 percent, according to Veuger’s study.

He called the impact “the superstar effect,” based on James’ singular ability to draw a crowd.

NBA attendance numbers show the Cavs sold out every home game this past season and brought in more fans at away games than any other NBA team.

“Not every player is going to make a difference in how well the team does, how many people go to games, and how well the bars and restaurants around the stadium do, and so it’s only with real superstars that you see those differences,” Veuger said.

Those economic differences, though, were felt more in Cleveland than Miami, according to Veuger’s study. He says that’s because Miami is already a destination city. One more attraction doesn’t make a huge difference, just like it probably won’t for L.A. either, Veuger said.

“It’s also not where LeBron is from, which makes it less special too,” he added.

But Will It Really Have an Impact?

When it comes to the broader economy, the research firm Convention, Sports and Leisure International reports the 11 NBA playoff games played at the Q since 2014 have generated more than $31 million for the city, games that likely would’ve never been played in Cleveland without James.

“There’s no doubt that LeBron leaving will have an impact,” Emily Lauer, communications director for Destination Cleveland, said. “We saw that 8 years ago when he left, but I think Cleveland is a very different place in 2018 than it was in 2010.”

In 2018, both the world and Cleveland natives have a more positive perception of their city, Lauer said.

That perception change stemmed from several things, she explained.

Partially because of the positive media attention James has brought to northeast Ohio, but also from 2016’s Republican National Convention, the influx of Clevelanders moving into downtown-- creating a new energy in the city’s core-- and the Indians aren’t doing too bad either.

“The departure of the greatest basketball player of all time, and perhaps the greatest athlete of all time, does not mean the demise of Cleveland,” Lauer said. “Cleveland’s greatness is defined by more than one person.”

Cleveland is evolving, Lauer added, and Pickwick and Frolic owner Nick Kostis agreed.

The day after James announced his departure, Kostis said, the sun rose in Cleveland. And it will keep rising long after LeBron James is gone.

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