City Council is poised to vote Tuesday on a contract to build a baseball stadium, with the team’s owner pledging money even if the Bull Street development falters.
Under the agreement, Hardball Capital would be on the hook for payments until the total amount of private development in the Bull Street project reached $60 million. Those payments are intended to offset any financial drain to the city should the development be slow to build out.
“If we are talking about this as being an economic-development generator, it wasn’t an unfair request to say why don’t you guarantee some economic development or are you willing to share the pain if the economic development isn’t what we expect or until it comes online,” Jason Freier, Hardball Capital’s chief executive officer, said Monday.
The latest version of the proposed contract, which guarantees the team will play in the stadium for 30 years, requires Hardball Capital to pay $6 million toward the stadium’s construction. That’s about 17 percent of the construction costs.
The proposed contract also provides the city revenue through annual licensing fees based on attendance, a cut of sales from the concession stands and a portion of naming rights for the stadium.
The total estimated cost to build the stadium is $35 million, and the city would pay the remaining $29 million by issuing hospitality bonds, Jeff Palen, the city’s chief financial officer, said Monday.
The money generated through naming rights, licensing fees and concession sales would be placed into a capital maintenance fund, which would be used to pay for major projects at the stadium, Palen said. The goal would be to build a pot of money for improvements that would keep the stadium up-to-date and a competitive venue for events.
“We’re not talking about everyday, normal maintenance expenses that pop up,” Palen said. “Most of that will be on Hardball Capital.”
But the money Hardball Capital would pay toward economic development would not be limited to the ballpark, Palen said.
That money would be used to offset the city’s debt to build infrastructure such as water and sewer lines through the entire development.
Under the proposed agreement, Hardball Capital would pay an annual maximum of $516,000 if private investment was $30 million or less. Hardball’s obligation would be reduced on a sliding scale, based on the level of private investment. So, the more money private investors pour into the Bull Street project, the less Hardball contributes, according to the proposed contract.
There is no time limit for how long Hardball would make those payments. Instead, it solely depends on how fast Bull Street developer Bob Hughes recruits other investment. If the development sits idle for five years or even 10 years, then Hardball would pay each of those years until the total private investment exceeded $60 million.
And the private investment must generate tax revenue for the city to count towards the goal, Palen said.
Freier said he agreed to put his money where his mouth is because he believes the Bull Street development will be successful and will have a positive impact on the city.
Thus far, Hughes has not released any potential contracts with private businesses interested in the project.
Barring any economic crises such as another housing market crash, it should not take Hughes long to reach the $60 million private investment level. One large-scale housing complex would bring almost that amount, or Hughes could recruit one major retailer and build a moderately-sized condominium complex.
To illustrate the amount involved in similar investments, a developer recently sought city approval for a $60 million, 800-bed student housing complex on the corner of Huger and Blossom streets. And late last year, Bass Pro Shops pledged to invest $25 million to build a 130,000-to-150,000-square-foot store in Charleston.
The proposed plan for a stadium has been met with a healthy dose of skepticism from critics who argue it is not a wise investment. They hold the position that the city already has overextended itself financially and the ballpark funding could cripple the city financially.
That criticism was on display Monday during the weekly meeting of the Columbia Rotary Club. The club, which already had heard a presentation in support of the ballpark, allowed three people with opposing views to speak.
William Leidinger, a former city manager of Richmond, Va., spoke about his experiences with ballpark funding in that city. He shared some suggestions on how city officials should approach the deal. One piece of advice to public officials was to “Make sure you sell it to the public for what it is, not something it might be.”
He also cautioned against what he described as an “edifice complex” among public officials who always are eager to build ballparks and other large facilities.
John Ruoff, who runs a firm that analyzes public policy, criticized an earlier economic-feasibility study for a ballpark. He said a ballpark will not generate new money in the local economy.
“There is not a lot of travel to come see a minor league ball game, especially after the first few years,” Ruoff said. “What you are going to get is a Chuck E. Cheese with wooden bats and beer.”
And Walda Wildman, a Columbia accountant, questioned the financial strain that would be on the city as it spends millions to develop Bull Street and the baseball stadium.
She also criticized the city for releasing the proposed contract on Friday night and then asking City Council to vote on it Tuesday, leaving little time for people to understand the agreement.
“We came with sheets of questions about the contract and council members are being asked to vote on this tomorrow.”
Reach Phillips at (803) 771-8307.