Ballpark proposal goes before city council Tuesday
COLUMBIA, SC (WIS) - Time is running out for the City of Columbia to make a decision on a ballpark.
Mayor Steven Benjamin has said he wants a Minor League Baseball team playing in Columbia for the 2015 season. To make that happen, construction needs to start by May.
Columbia City Council members are scheduled to vote Tuesday night on an agreement between the City and Hardball Capital.
There are mixed reviews to the proposal. Some people think it's a home run, while others are calling foul.
Most of the discussion centers around how to pay for the stadium. The Bull Street project, including the baseball stadium, is projected to cost more than $90 million over five years.
The City of Columbia has laid out some funding options, including $9.4 million in cash, $24-million in a Hospitality Bond, and $57-million in an Installment Purchase Revenue Bond.
"What's different about these bonds and say, what you and I get when we go to the bank to borrow for a house, is that, these bonds are the obligation of the people who live in the city," said Jean Helwege, a Professor of Business Administration at the University of South Carolina. "They both rely on the success of the stadium."
At ballpark forums, some residents have asked about General Obligation Bonds but Helwege says that's not the way to go.
"If somehow it fails and it's a General Obligation Bond, then the taxpayers of Columbia would have to pay every dime of that $100-million," she said. "Otherwise, they would be defaulting on all of their debts and it would be chaos, the same way it is in Harrisburg and Detroit."
She said there is a risk in using bonds.
"Historically, municipal bonds have been a very safe thing for investors, very few defaults, but since 2008, we've seen a remarkably high number of defaults given that we had almost none before," she said.
So what does this mean for Columbia? Can it be done, with no tax hikes, like Mayor Benjamin says?
''If people love baseball and this is a great place to go, then there will be lots of business, and if they have done their math correctly, then the profits they make, or at least the revenue that comes in to the stadium, will go to paying off the debt and the taxpayers will be better off, because not only will they not default, but they will have a baseball stadium and a team," said Helwege.
According to information released by the City of Columbia the city could experience no growth for the next 30 years and still make Installment Purchase Revenue Bond payments because it's based on what the city has, not what the city hopes to have.
Mayor Benjamin has said numerous times the project will not increase taxes.
The most important thing for taxpayers to ask about, according to Helwege, is interest. If the City of Columbia did have to default on bonds, Helwege says it would be bad for the City's credit rating and future borrowing.
A first reading on the proposal is on the agenda for the city council meeting Tuesday night. Also on the agenda are a staff update on the Bull Street Development and ballpark, discussion and public input session.
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