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Abstract

In 2012, the Golden State Warriors and the City of Santa Cruz came to an agreement that brought the Warriors’ G-League affiliate to town with the construction of a temporary 2,400-seat arena. As the basketball season runs from November to March, the City hoped to leverage the team to stimulate economic activity in the downtown corridor during the slower winter tourism season. This paper evaluates the team’s economic impact on Santa Cruz’s downtown economy using a range of data sources, including financial reports from the City of Santa Cruz, foot traffic data from Placer.ai, the Downtown Association, historical sales tax data, hotel occupancy rates, and insights from 15 of the most affected local businesses. Additionally, interviews with the Warriors’ President, COO, and Financial Director provide an executive perspective on the team's role in the local economy. A key innovation of this study is the use of Artificial Intelligence-driven foot traffic analysis from Placer.ai to quantify visitor patterns and assess the team’s ability to drive economic activity beyond the Arena itself. Key findings indicate that game nights generate an approximate 19.0 % increase in revenue for downtown restaurants and bars, with foot traffic rising by 17.6%. While regression analysis does not show a direct correlation between the team’s presence and citywide financial indicators, which are tracked too generally to pinpoint impact, qualitative data and localized spending patterns suggest a meaningful economic contribution. Finally, this research discusses the potential for a permanent mixed-use arena with an additional ~800 seats, evaluating whether increased capacity and events could further strengthen the team's role as an economic driver in Santa Cruz. Findings support the argument made in academic literature that minor league teams in smaller, tourism-dependent markets can serve as economic stabilizers, challenging traditional stadium impact models.

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