Trio Of Ballpark Projects Face Different Fates
Three cities faced weighty questions about building new minor league ballparks this fall, and all three came to very different conclusions.
First was Bakersfield, which you can read about in more detail on the Business Beat
. The city has had a team in the California League since 1982 but plays in outdated Sam Lynn Ballpark and averaged just 637 fans a game in 2012. The Cal League has steadfastly kept the team in town, however, with the belief that Bakersfield can be a great market with a new ballpark. At long last, the team's new owners announced a privately financed ballpark plan that they hope will have the Blaze in a new home for the 2014 season.
Matters were more complicated in El Paso, Texas, and Wilmington, N.C., however, because officials there were asking for public money to build new ballparks that would bring a new franchise to town.
In Wilmington's plan, taxpayers would have paid for a $37 million ballpark project through an increase in property taxes. The Atlanta Braves and Mandalay Baseball Properties planned to buy the Lynchburg Hillcats, and move the Carolina League franchise to Wilmington.
In legal language, Wilmington voters dismissed the idea with extreme prejudice, with 70 percent voting against the referendum to pay for the park. Wilmington has had Southern and South Atlantic League franchises briefly in the last 20 years, but both left quickly for the same reasons: inability to build a long-term home.
In El Paso, on the other hand, voters approved a hotel tax increase to help pay for a new $50 million downtown ballpark nearly as emphatically as Wilmington voters rejected their proposal. About 60 percent of El Paso voters approved a plan to raise the hotel tax by two percentage points.
El Paso hasn't had affiliated minor league baseball since 2004, when a Texas League franchise left town. The new stadium will be home to the Pacific Coast League franchise currently playing in Tucson, which El Paso real estate magnate William Hunt and oil and gas tycoon Paul Foster purchased from former Padres CEO Jeff Moorad earlier this season, and is scheduled to debut in time for the 2014 season. The stadium will be built on the site of El Paso's city hall, which will be demolished, and city government will move to another downtown location.
The votes highlight the challenges of ballpark building in the current climate. Few projects move forward without significant private contributions now.
For example, the Scranton/Wilkes-Barre Yankees (International), which Mandalay Baseball purchased last year, split the cost of a new $53 million venue with state and local municipalities. The Charlotte Knights (International) broke ground on a new ballpark this fall, contributing $38 million themselves to the $54 million project—primarily through a naming rights deal with a bank. The Potomac Nationals (Carolina) have a proposal in the works for a privately financed ballpark in Northern Virginia that will be enhanced by a $15 million parking deck paid for by the state. Even in El Paso, the hotel tax increase will pay for only about 70 percent of the ballpark project.
Asking For A Handout
The Wilmington project was unusual, then, not just for its almost complete reliance on public money, but also because the money was coming from a property tax increase that went right to residents' wallets. Most projects use other public financing models, such as revenue bonds, that do not directly affect someone's tax bill. Or in El Paso's case, a hotel tax that is borne more by visitors to the city than by residents.
That decision was obviously a significant miscalculation, and the voters' rebuke ended the yearlong Mandalay-Braves effort to bring the team to Wilmington.
"We're very disappointed with how it went, both Mandalay and the Atlanta Braves," Mandalay Baseball CEO Art Matin said. "We thought it was a terrific opportunity for people in the city of Wilmington because we have seen it work so many times throughout minor league baseball."
Matin said the Braves and Mandalay have no plans to pursue the project further. He said he understood the reluctance of residents to take on new taxes, but noted the team would have paid $500,000 annually in rent and would have covered the costs of the acquiring and moving the Lynchburg franchise. He said paying for the ballpark was not an option.
"That is not something we see as a viable alternative," he said. "We were planning on already making a significant contribution, but completely financing the ballpark is not something that makes sense. That is just not the model of how these things get done."
Matin has a point to some degree, as the overwhelming majority of sports venues in America have been built with mostly public money. But in the case of a minor league market in particular, it's worth asking if more of the burden should be shared. In Wilmington's case, a Major League Baseball franchise valued at $500 million by Forbes and an entertainment conglomerate that owns multiple minor league franchises as well as the NBA's Golden State Warriors, not to mention movie and television production companies, asked a city of 100,000 people to front them $37 million.
You can understand Wilmington residents' skepticism about that deal. What is worth appreciating, though, is Wilmington's direct approach: We can have a team and it will be cool to have a downtown, riverfront ballpark, but it's going to cost us.
They asked the question in a straightforward way and gave all voters a chance to weigh in. You have to wonder how many other minor league ballparks might not have been built if every city took the same approach.