No Never Means No in the Politics of Sports Facility Construction
By Evan Weiner
November 22, 2010
(New York, N. Y.) -- In the suburban New York City at the Town Hall of Ramapo in Suffern, New York, which is about 35 miles north of the George Washington Bridge, Ramapo Supervisor Christopher St. Lawrence will once again on Tuesday night explain why he feels there is the need to spend millions of dollars for a project that has failure written all over it.
St. Lawrence is continuing his quest to bring an independent baseball league franchise to what once was a wooded area in his town.
St. Lawrence is so gung ho about getting a 3,500-seat facility built on the taxpayers’ dime that he has decided that to ignore the results of an August referendum election which saw local voters turn down the stadium spending request by a 2 to 1 margin. The referendum result apparently was a mirage. Yes the voters said no, but they were clearly mistaken. It wasn't the ballpark or the fact that St. Lawrence has an agreement with the financially-troubled Can-Am League to play at the facility that caused a landslide vote.
Despite the loss, St. Lawrence is plowing ahead with his initiative. The Ramapo Town Board has since the defeat approved a payment of $8,700 for a traffic study of the roads around the site. Then $336,296 was quietly allocated for the site this despite the vote when Ramapo residents said they did not want to put up $16.5 million for the stadium.
Ramapo residents welcome to the "Business and Politics of Sports." Ramapo now has a chance to join a select group of municipalities who voted down stadium or arena packages only to see elected officials overturn the result. No never means no in the political sports arena.
St. Lawrence wants his town board to transfer 61 acres of Ramapo land to the Ramapo Local Development Corporation and use 27 acres to build a small baseball park that will seat 3,500. St. Lawrence plans to proceed with plans for the stadium that could cost taxpayers even more money. Ramapo could pay a higher interest rate on the 20-year bonds, which have been guaranteed by the Ramapo Local Development Corp., or vote to finance the stadium with town funds. Either way, Ramapo taxpayers stand to lose more than they will gain and the possibility of cutting needed town services becomes greater as stadiums and arenas are endless money pits for their owners, town boards like Ramapo.
The stadium idea seems to be a misguided adventure that might have made sense in 1959 after the Tappan Zee Bridge opened north of New York City and when city residents flocked to Ramapo and Rockland County. A stadium with business going up around the facility might have be a gateway to the town but just building a stadium off of parkway and a state road, Route 45 makes no sense in 2011 as there the ballpark is being built in a mature suburb and will not generate any business development or spur housing.
St. Lawrence wants to build a baseball park for an independent league team in an area that has never supported any kind of big time sports or entertainment. At one time, the Nanuet Theater-Go-Round in the late 1970s brought the biggest names in show business to the area but the concept failed and there is now a church in the facility which is about 10-15 minutes away from St. Lawrence's ballpark.
Big time tennis in Mahwah, New Jersey, also within 15 minutes of St. Lawrence's ballpark folded after nearly two decades of mediocre support about 10 years ago.
St. Lawrence is going after a team in a grouping, the CanAm League, that has hardly impressed anyone. The league gets no media attention, has no TV contract and has problems attracting fans.
The 2010 CanAm champions Quebec City franchise led the league in attendance with 147,978 people in 45 games or an average of 3,288 per opening. A team in the backyard of the Boston Red Sox, the Brockton Rox did as much business over 46 games as the nearby Boston Red Sox get in three openings. A slightly more than 100,000 people saw Rox games, 100,092 to be exact or 2,175 a game. Another franchise near Boston did even worse. The Worcester Tornadoes franchise had 88,499 customers in 45 games or 1,966 per opening. The New Jersey Jackals franchise playing on the campus of Montclair State in New Jersey next to the Yogi Berra Museum and within the shadow of the Meadowlands Sports Complex and with Manhattan in the distance had 86,014 people in the stands in44 dates with an average attendance of 1,956 a game. Another New Jersey team, the Augusta-based Sussex franchise ended up with 71,826 patrons in 43 dates or 1,670 a game. Pittsfield could not even break four figures for a per game average. Only 29,485 people came through the turnstiles in 42 games for an average of 702 customers a guy.
The Canadian-American Association of Professional Baseball started business in October 2004 with franchise in Bangor, Maine, Brockton, Massachusetts, Elmira, New York, New Haven, Connecticut, Lynn, Massachusetts, Little Falls, New Jersey, Quebec City, Quebec, and Worcester, Massachusetts. Bangor never opened the doors and the league replaced the franchise with a road franchise called the Grays. That franchise and Elmira folded after 2005 and the franchises were replaced by Augusta and Nashua, New Hampshire in 2006. Two more teams joined the league in 2007, Atlantic City, New Jersey and the road franchise known as the Grays.
Lynn and New Haven folded after the 2007 season. Ottawa joined the league for 2008 and replaced the Grays. Atlantic City and Ottawa did not return in 2009. The Nashua franchise was locked out of the local stadium because of the failure to pay rent and became a road team. That franchise moved to Pittsfield after the 2009 season. The league will add Newark, New Jersey as a seventh team in 2011. Newark was a financial failure in the Atlantic league of Professional Baseball. The Ramapo team would be the eighth team and is needed to balance out the league so everybody can play every day.
That is the league that St. Lawrence desperately wants to have Ramapo join.
In sports, saying no to a stadium or an arena proposal doesn't mean no. In the mid-1990s, voters in Seattle, Pittsburgh, and Milwaukee voted against funding for new baseball parks and in Pittsburgh's case a new football stadium as well. Yet the Seattle Mariners ended up with a new, taxpayers funded ball park as did the Pittsburgh Pirates and the Milwaukee Brewers. Pittsburgh also built a new facility for the NFL Steelers.
In Charlotte, voters said no to spending $342 million for a new arena in June 2001 with a 15,000 vote majority. George Shinn took his National Basketball Association franchise to New Orleans in 2002. Charlotte spent $52 million to build an arena in the late 1980s. The structure opened in 1988 and by 1999, Shinn was pushing for a new Charlotte arena for his Hornets because the 11-year-old facility was outdated.
Once Shinn was gone, Charlotte decided that the city needed an NBA team and that the 2001 vote was a referendum on Shinn not the need for a new arena. The city was promised an expansion team by NBA Commissioner David Stern if elected officials came through on a promise to build a new arena. Charlotte Mayor Pat McCoury said one of the reasons that he wanted a new arena built in the city to replace the one that opened in 1988 was that the city would get free publicity every time Charlotte’s basketball team’s highlights were shown on ESPN.
The city spent $265 million to get back into the good graces of the NBA and in exchange, Bob Johnson bought the 2004 expansion team which moved into the new arena in 2005. Arena revenue streams from club seats, luxury boxes (two items that Shinn really did not have) were supposed to make a Charlotte team financially competitive. The franchise has had money problems since day one and the Charlotte Coliseum was demolished in June 2007 at the age of 19.
But in sports, saying no to a stadium or an arena proposal doesn't mean no. State politicians in Washington, Pennsylvania and Wisconsin decided that the voters really didn't intend to kill the ballparks and overturned the vote by taking it out of the voters' hands and passing state legislation raising taxes to build ballparks in Seattle and Milwaukee.
Weeks after the Seattle ballpark referendum was defeated, Washington Governor Mike Lowry on October 24, 1995 signed a bill which allowed King County to create a .017% sales tax, which was offset against the sales tax now collected by the state in King County. Other funding mechanisms included the sale of baseball stadium commemorative license plates as well as using money from sports theme lottery scratch games. Non baseball fans were hit as well as baseball fans for dining as a special stadium sales tax of .5% on restaurants, bars and taverns was levied for patrons in King County and as a special stadium sales tax of 2% on rental cars was implemented. The Mariners contributed $75 million.
The Kingdome was blown up in 2000 but the debt service lingers on until 2016.
In Pittsburgh, Plan B was enacted by city and Allegheny County politicians and money was found to build a new baseball park and a football stadium. Pittsburgh and Allegheny County residents were still paying off the debt on Three Rivers Stadium when the two new parks opened. Three Rivers Stadium was blown up in 2001 but the debt service wasn't.
In Milwaukee after voters said no in January 1995, the state houses (the assembly 52-47) and the state senate 16-15) said yes and sent a bill to Governor Tommy Thompson to sign that made taxpayers in Milwaukee, Racine, Waukesha, Washington, and Ozaukee Counties pay additional sales taxes 0.1% sales tax to cover 77.5% of the costs of the baseball stadium they didn't want. The tax is scheduled to end in 2014. The most interesting part of the Brewers/Wisconsin stadium deal came nine months after the October 6, 1995 vote by the state senate to approve the taxation. State Senator George Petak, a Republican from Racine, originally voted no because Racine had nothing to do with Milwaukee economically and Petak felt that Racine should not be included in the taxation method. Petak voted no but switched his vote which allowed the stadium package to pass by a vote.
Petak was recalled by Racine voters nine months later and ousted from office because of his support for the stadium financing scheme. But the stadium was built.
Politicians just cannot say no to sports. Yonkers, New York has been pushing to build a 6,500-seat baseball park for another independent baseball circuit, the Atlantic League for 10 years now but the project has not taken off. The former mayor, John Spencer, brought out the old and worn out axiom that the ballpark would be an economic engine---a notion that has been put to pasture by virtually everyone over the past two decades with stadium economic impact knowledge----but so far the stadium project remains on the drawing board.
Ramapo Supervisor St. Lawrence hasn't given up yet and probably doesn't know much about George Petak.
Last spring, St. Lawrence signed a memorandum of understanding through the not-for-profit Ramapo Local Development Corporation and Bottom 9 Baseball, LLC to pave the way for a team with Bottom 9 Baseball, LLC running the franchise. The document was not a binding legal paper but it laid out what was ahead for Ramapo taxpayers and the baseball team owners. RLDC and Bottom 9 Baseball had 18 months to finish a deal after the clock started on June 4, 2010. It is not as though Ramapo had many suitors at the town's doorstep for the new stadium. It is going to be a tough go for anyone to sellout a 3,500-seat baseball stadium in Ramapo and in the "secondary" markets of Rockland and Orange Counties in New York and Bergen County in New Jersey.
The contract between the town and the team will be for 20-years, which is quite a stretch considering the Can-Am League is just playing a sixth season after reorganizing following the failure of the Northeast League. The Northeast League began in 1995 and merged with the Northern League in 1998. The two groups split after the 2002 season.
The league has never enjoyed financial stability in 16-years of various incarnations.
The Ramapo-Bottom 9 Baseball deal could have fallen apart on August 15, 2010 if a number of conditions were not been met. Apparently the referendum failure was not a deal breaker. Ramapo and RLDC have to find money to support the construction (with or without Ramapo taxpayers' approval) and have to get all the necessary land approvals. Lawsuits could delay or scuttle the project entirely. Bottom 9 Baseball also has to be in a league by October 8, 2010. As of today, November 22, 2010, the CanAm League officially has seven members and no team in Ramapo. Apparently that is not a deal breaker either.
Assuming Bottom 9 Baseball gets into the Can-Am League (and pays a million dollars or so for that right) and is set to go and Ramapo or the RLDC gets the stadium funding together, the new facility will be built over the winter and will be ready to open on June 6, 2011. Bottom 9 Baseball will be throwing a million dollars or four percent of the estimated costs into the venue. The team will pay $175,000 a year in rent. It would take more than a century for Ramapo to get back the construction costs at that rate. The team threw a couple of bones to Ramapo. The municipality will get a dollar for each ticket sold (not including those seats in the stadium's 20 luxury boxes – the town will get some money from those seats and some money from the sale of the stadium's naming rights. What are the odds that a Ramapo Stadium can get any money for naming rights when the New York Giants/Jets Meadowlands Stadium, the Dallas Cowboys Stadium and the Golden State Warriors facility are still unnamed? What also has to be disturbing to St. Lawrence is that the city of Jacksonville waived the 25 percent of an estimated $16 million naming rights deal at the city's stadium to help the Jacksonville Jaguars bottom line. The city is forfeiting $800,000 in revenues annually for the next five years.)
The team will give Ramapo two dollars from each car parked in the stadium's lot for a game. The town will also get 10 percent of the concessions whether it is food, beverage or merchandise sold at the stadium. The team will keep signage rights in the building. Based on Can-Am League attendance figures, the Town of Ramapo will get somewhere between $3,000 and $4,000 a game if the town and team is lucky.
St. Lawrence is absolutely convinced that spending what will become tens of millions of dollars will be a good investment even though there is so much documented proof that municipalities going into the sports business end up having to constantly scramble for funds to cover unanticipated expenditures starting with stadium cost overruns. But St. Lawrence knows better than stadium opponents and the real life experiences in places like Cincinnati, Indianapolis and Jacksonville, after all his hired firm of financial consultants Fishkind and Associates has told him that the ballpark will be a winner.
Fishkind thinks the stadium will bring in $1.4 million a year which would cover the $1.3 million annual debt service that St. Lawrence projects for the stadium. Politicians when it comes to stadium costs are so easily fooled. There is a paper trail of consultant figures that can fill up rooms at municipal buildings around the country of rosy projections. In Cincinnati, the city and Hamilton County need to find money somewhere to cover the debt of the city's football stadium.
Revenues will come in at $500,000 for the Town of Ramapo and that is a big maybe from games in real world projections not Town of Ramapo-hired economist projections.
Ramapo taxpayers better understand that this stadium will be a loss leader no matter what both sides say. Ramapo officials think the team will bring in $900,000 in stadium related revenues. The bad news, the revenues figure is grossly overstated, the good news for Ramapo is that at this point they are not being asked to pay the team's expenses like New Orleans and Indianapolis and Glendale, Arizona residents are doing for pro sports teams. The bad news is that Ramapo will have to find money somewhere to pay from the annual $1.3 million stadium debt. That money won't be coming from local college baseball teams (Rockland Community College, St. Thomas Aquinas College and Dominican College) or high school baseball or stadium concerts, as the seating capacity is too small for anything but small acts.
There is also a question of infrastructure (road repairs, sewer installation and other improvements) and other costs including police. Can the area also handle game day traffic, although that would seem to be a moot point considering the lack of attendance in the Can-Am league?
Another question that should be answered: Who is paying RLDC's legal fees? St. Lawrence or the town?
There is also a clause about radio and TV and how Ramapo and the RLDC will get some advertising money from broadcasts and telecasts of the team. Many Major League Baseball teams, National Basketball Association, National Hockey League and National Football League teams have revenue sharing deals with local radio stations and a radio network. Ramapo has two radio stations.
There is a major radio problem, the stronger signal of the two Rockland radio stations (a 1,000 watt daytime) broadcasts in Polish and the other is a 500 watt station daytime that doesn't cover the entire county. Most games will be played at night when the station's signals are diminished under rules established by the Federal Communications Commission. The money that can be charged for a commercial on a small radio station for an independent baseball league team might amount to tip money at a local diner.
There is always Internet radio.
Unless some local access cable TV company wants to put some games on TV, there will be no TV. The affiliated Brooklyn Cyclones franchise in the Short Season A Ball, New York-Penn League is owned by the New York Mets and there are a couple games on TV on SNY and maybe a game here or there on WFAN. The Yankees' Staten Island affiliate in the New York Penn League is on the YES Network once in a while or a blue moon, whatever frequency is less.
The terms of the Ramapo-Bottom 9 Baseball agreement heavily favors the baseball team which is not surprising.
If the stadium is not done by June 6, 2011, Ramapo will pay Bottom 9 Baseball a penalty of $2,500 a day for every day the stadium is unusable or up to $175,000. If construction of the stadium starts and Bottom 9 Baseball cannot get into a league, Bottom 9 Baseball has to give Ramapo $675,000.
If the stadium isn't built and the RLDC and Bottom 9 Baseball have an agreement and the agreement is canceled out because there is no stadium by September 30, 2011, Ramapo taxpayers are on the hook for $500,000 as a penalty for Ramapo not living up to the contract.
Bottom 9 Baseball gets exclusive use of the stadium 85 days a year, which is the summer when an outdoor stadium in the northeastern part of the United States should be most utilized. Ramapo gets the stadium 280 days a year, mostly in the winter. It is hard to hold an outdoor concert on January 17 and putting a temporary ice rink in the middle of a 3,500-seat outdoor facility in winter borders on financial lunacy if the town thinks that an outdoor rink in a baseball stadium will make some money.
There is a high baseball team mortality rate in the Can-Am league. Chris St. Lawrence probably doesn't want to know all of this but Ramapo residents should. There really is no media in Ramapo other than the local Gannett newspaper which has shrunk the paper's newsroom staff and the physical size of the paper that has gone into any real detail about what is a failed urban and public policy----stadium and arena subsidies.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at www.bickley.com or amazonkindle. He can be reached at email@example.com