Final vote on controversial stadium loan set for Tuesday
07/15/2014 12:11 AM
02/21/2015 6:12 PM
The much-disputed public funding for Columbia’s new year-round stadium faces its final vote Tuesday.
City Council is scheduled to cast its second and binding vote to get a 30-year loan of up to $35 million that would be repaid from meal taxes through the year 2043.
The vote is to come on the heels of the owner of the minor league team that is to play in the stadium filing last week with Minor League Baseball for permission to move a team to Columbia.
Jason Freier, owner of Hardball Capital, would not say Monday which team he would relocate to the city or whether he would buy a third team if Savannah, where he owns a team, replaces its outdated facility.
“We have not taken any steps that would stop us from having teams in both cities,” Freier said.
Projections for stadium construction costs are that the city would have to borrow $32,180,000 to net the $29 million it needs to build a facility that could hold up to 8,500 people for minor league baseball games, concerts and other community events. The $29 million figure is a cap on how much taxpayers would have to contribute toward building the facility.
The stadium is billed as being able to attract 500,000 visitors yearly to the downtown area and to produce $411.5 million in taxes, wages and spending, according to Columbia’s often criticized feasibility study.
Council tentatively adopted the loan on June 24 on a 5-1 vote.
Interest on $32.1 million would amount to $28.9 million by the time the 30-year loan is paid off, according to estimates from Columbia’s chief financial officer, Jeff Palen, and City Hall’s financial adviser, Brent Robertson.
A projected $693,000 would go toward paying Robertson, bond attorneys who will advise the city as well as for the underwriters and the fees the bank would impose, Palen said as recently as Monday.
The city also must set aside $2,485,000 in a reserve account to pay debt service in the event Columbia runs into trouble coming up with the money for that annual payment, Palen said.
Annual payments toward the debt are expected to amount to $1.3 million for 30 years. That’s on top of roughly the same amount due yearly for the first meal tax loan that dates to 2003. That means taxpayers will pay $2.6 million in debt service for both loans through 2025, city figures show. But the annual debt payment will drop only slightly, to $2.5 million, beginning in 2026 after the first loan is paid off, Palen said.
The company the city has hired to run the stadium, Hardball Capital, will contribute $6 million toward the construction. That sum could be in the form of paying for a multimillion-dollar video screen or other amenities, for example.
A provision has been added to the loan document council is to vote on. It states that if the stadium came in under the $29 million budget, council could use any leftover money for any other project that qualifies for meal tax expenditures, Palen said.
“They’d still have to vote and amend this document,” he said of the loan agreement.
State law limits the use of the money largely to projects that spur tourism or promote the arts.
The city’s 2 percent tax on prepared meals and beverages – first imposed in summer 2003 – is projected to generate $9.7 million for the fiscal year that ended June 30. Final figures for 2013-14 are likely some time next month, Palen said.
For the fiscal year that began July 1, the tax is projected to produce somewhere between $10 million and $11 million based on rising collections from the past four years.
Council spends its meal tax revenue, which legally is called a “hospitality tax,” for a range of services, including its soon-to-be-enlarged “hospitality team” that enforces city and state laws in Columbia’s entertainment districts such as the Vista, Five Points and the Main Street corridor.
An attorney for the National Association of Professional Baseball Leagues (Minor League Baseball) notified city manager Teresa Wilson in a July 11 letter that Freier had submitted an application, as Freier is required to do by mid-July under the terms of the contract to build the stadium in the center of the proposed Bull Street neighborhood.
Freier said he filed the application last Thursday or Friday. But he declined to discuss any details. “The application has confidentiality provisions,” he said Monday.
Under his contract to manage the stadium, Freier must have final approval by October of which team is coming to town.
Frier also owns a team in Fort Wayne, Ind. It is highly unlikely he would move such a successful team as that to Columbia.
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