Funding options for ballpark do not include raising taxes - wistv.com - Columbia, South Carolina |

Funding options for ballpark do not include raising taxes

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City Council hears comments from public on baseball proposal City Council hears comments from public on baseball proposal
COLUMBIA, SC (WIS) -

Faced with having to come up with at least $35 million to build a ballpark in the Bull Street development, Columbia City Council is looking at funding options.

Before voting to authorize City Manager Teresa Wilson to work on a contract with Hardball Capital, the ownership firm who would bring a minor-league baseball team to Columbia, council members were briefed by the City Finance Department on some funding options to pay for the ballpark.

According to a handout of frequently asked questions, none of the options includes raising taxes.

According to the information presented to council members Tuesday, the city has three options for funding the ballpark: cash, hospitality bonds or installment purchase revenue bonds.

The estimated available funding generated by the cash option would be $9.4 million.  The hospitality bond would generate $24 million and the installment purchase revenue bond could create as much as $57 million.

Paying for the ballpark is just one aspect of the Bull Street development for which the city is required to pay. In addition to $31.2 million in infrastructure, such as sewer, water, storm water drainage and roads, the city is expected to spend $24 million to build  two parking garages on the site. With an anticipated $35 million cost of the ballpark, the city's total investment in the Bull Street site would be more than $90 million.

But these financial commitments had council member Leona Plaugh concerned about paying for basic city services.

"How are we going to pay for our equipment?" she asked. "Our vehicles? Our fire trucks?"

Plaugh proposed a motion to stop all negotiations on the project but council rejected it.

City financial responsibilities won't end with the construction of the ballpark.  But Hardball Capital has agreed to pay for maintenance and upgrades on the ballpark through the term of the proposed lease.

Throughout the discussion regarding the stadium, the words "public-private partnerships" have been used by Mayor Benjamin.  WIS has asked the mayor if any private investors or corporations have shown interest in assisting with the finances or if selling the naming rights to the ballpark has been considered.

Benjamin said via e-mail he is not identifying any specific additional private investment, but "We can do this now, today, and maintain all of our obligations."

"What we're talking about here is leveraging private investment in a public park and jumpstarting a project that will bring 180 acres of tax exempt property back on the rolls" said Benjamin."We aren't even coming close to testing the city's fiscal limits."

Developer Bob Hughes says building the stadium now, with a site that is fairly empty, is the cheapest option.  Hughes has agreed to donate the 10-12 acre ballpark site to the city.

"This is not public money being spent on a private ballpark," Hughes said at the meeting Tuesday. "This is private money being spent on a public ballpark.  The City of Columbia owns this ballpark. You heard Jason (Freier) say you get to use it, anything you want to use it for.  He just gets to use it for 70 baseball games," he said. "In exchange, he will pay a large part of the cost and he will take care of all of your maintenance in the future."

Mayor Benjamin's office provided the chart below:

Funding Options (combined Columbia Commons and Multi-Use Venue)

  • Installment Purchase Revenue Bonds (IPRB) = $57 million
    • Capacity based on existing assets not growth projections
  • Cash (Pay As You Go) = $9.4 million
    • $6.125 million for water/sewer infrastructure
      • No water/sewer bond; water and sewer revenues used only for water and sewer.
  • $3.275 million for storm water infrastructure
    • No storm water bond.
  • Hospitality Bond = $24 million
    • Used for tourism projects including a multi-use sports and entertainment venue and related parking
  • Total = $90.4 million
    • (No tax increase, no fee increase, no budget cuts, no water/sewer backstop all within our existing debt capacity)
  • Proposal generates $164,000 more than is needed to fund the full Columbia Commons project as well as the multi-use sports and entertainment venue.

 

Multi-use Venue Cost/Benefit Analysis

Cost = $35 million

Total Fiscal Benefit = $75.5 million

  • $3 million from Hughes Development
    • Estimated value of 10-12 acres of land donated
  • $54 million from Hardball Capital
    • Lease Payments = $15 million ( estimate $500,000/year over 30 years)
    • Profit Sharing = $7.5 million ($250,000/year over 30 years)
    • Operations and Maintenance = $30 million ($1 million/year over 30 years)
  • $18.5 million in additional tax revenues
    • Hospitality (Hotel/Restaurant) revenues included
  • Does not include additional parking revenues, new water/sewer customers or revenues generated by new retail and commercial businesses in Columbia Commons
  • Also does not include benefit from 1,630 new jobs and $192.0M in new wages

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