Personally, I like the idea of tearing down Hammond and opening that area up. I like the outdoor concert space idea. I can see protests (Demlion???) and sporting rallies there. I can see using that for vendor displays, blue band, other music, Shakespearian plays, overflow food (on game days).... It would be a great way to draw people to the area which would result in them walking into the city (which would help the economy).
I love walking down college avenue and it creates a nice game day experience. I am not sure blocking off a street, like has been done in Minneapolis and many areas, is the ticket here. I'd like a long term study done on traffic patters. Traffic is a nightmare in SC on game days. I know that's only a handful of days so perhaps it isn't in the best interest to build "game day" infrastructure ROI wise. If you create a nice "green space" or courtyard where Hammond currently is, you can both open it up and create a nice touristy area. Perhaps a walkway to the city over or under college avenue..
Overall, PSU and the city need to work together to a) create and maintain infrastructure on game days and b) create other venues to even out the visitor volumes on non-game days.