The Future of Baseball in SE Florida - The Ballpark of the Palm Beaches

[PowerBoater69]

The paper did the same poll a month ago and the results were 173-36 in favor of building a new ballpark. So the locals want spring baseball by a huge margin, but it's the sticker shock that reversed those numbers.

aroundosceola.com/index.php?option=com_poll&id=119:should-osceola-county-spend-millions-to-build-a-new-spring-training-baseball-complex

The next link is to a column from the Osceola News Gazette sports editor in favor of building the ballpark, containing the figures put forth in the tourism board's proposal. He adds some thoughts on how to improve the deal, ask the Lerners to pay a higher rent, and ask Disney to chip in. Kissimmee losing a team would be a significant blow to the Braves and Disney as they would then be in by the same situation the Nats deal with in Viera, not a single short bus ride. (Countering the numbers in this column are some figures quoted in the Kissimmee blog I linked earlier, they have studies showing that there is a negligible impact on the local economy when teams move in or out.)

www.aroundosceola.com/index.php?option=com_content&view=article&id=14454:spring-baseball-in-jeopardy-&catid=76&Itemid=70


The local Fox station has a recap of the events with no new news but one nice little paragraph.

The Washington Nationals vice president also promised he would pump "a lot of money" into the community, but he wouldn't commit to a specific amount, says Hawkins Jr.

www.myfoxorlando.com/story/22799193/washington-nationals-98m-state-of-the-art-stadium-hard-sell-for-one-osceola-county-commissioner

[PowerBoater69]

Reports are that Osceola Chamber of Commerce President David Nolan has resigned. Nolan had brought up concerns about the ballpark funds being diverted from needed road projects. Some of the locals had questioned Nolan's history with previous chamber of commerce organizations, he was only in his current position for five months. This appears to be one of a series of maneuvers being made to clear the way for the ballpark to be approved. Ted Lerner channeling Vito Corleone.

[JCA-CrystalCity]

[shoeshineboy]

I hope they don't move to Kissimmee. Orlando is the pits. Being on the outskirts even more. They need to at least be near the ocean or the Gulf.

[JCA-CrystalCity]

I hope they don't move to Kissimmee. Orlando is the pits. Being on the outskirts even more. They need to at least be near the ocean or the Gulf.

Have you seen some of those maps of florida after the ice cap melts?

[PowerBoater69]

The chairman of the Osceola County Tourism Development Council, Brian Wong, chimes in with an op-ed piece. These numbers were quoted in some earlier articles, but here he adds some details. In addition to the numbers below, Wong mentions that Osceola is taking on all of the risk while the Nats are taking all of the revenue generating aspects of the park.

As the GM of the largest hotel in Kissimmee, Wong has a lot to gain or lose in this deal.

What is there to get excited about a complex that will lose $2.3 million annually? Capital investments of at least $1 million annually will also be required. Construction costs of $127.3 million consume $67.3 million of tax dollars in reserve, $10.5 million from the State, and a loan of $49.5 million more. The use of our reserves, plus $100 million of operating losses and capital improvements, and the $113 million of debt service on the loan totals $280 million!

On average, each year $9.3 million will be spent to generate 94,604 room nights to our hotels. Cost per acquisition is approximately $98.30 per room night when the average CPA for room nights acquired by our Department of Tourism Development through traditional marketing efforts is only $11.67. Given the average cost of a hotel room in Kissimmee is $76.73, it is clear that this is not an efficient use of our tax money and that there are many better alternatives.

Space Coast Office of Tourism Executive Director Rob Varley estimates the Nationals, who currently play in Brevard County bring as much as $10 million a year into their local economy. But, according to Osceola County’s optimistic projections, this complex will bring $144 million in local economic impact. Whose numbers are right?

If all games are played, the cost per game will be at least $600,000. Also, it’s noteworthy that this 400-acre complex would not be on property tax rolls.

www.aroundosceola.com/index.php?option=com_content&view=article&id=14481:spring-training-in-kissimmee-isnt-worth-280-million-&catid=19&Itemid=141

[HalfSmokes]

So what's plan b?

[PowerBoater69]

Here is a piece from a long article about public financing of spring training parks. There is also another interesting piece about how Winter Haven is doing better after the Red Sox left, and that was a team that could actually back up their attendance claims.

Economists, on the other hand, have a different outlook. Without a doubt, they say, municipalities get a bad deal when they fund spring training stadiums.

“There’s absolutely no need for any community to invest in a sports team,” says Philip Porter, a sports economist at University of South Florida in Tampa, located a few miles from the stadium Hillsborough County built for the New York Yankees.

Since teams move around so frequently, there’s ample data to determine whether a city suffers financially when its team leaves. But, Porter says, “nothing changes” when a team skips town. Sales tax, property values, and the size of the tax base generally remain at comparable levels, undermining the argument that the stadiums pose a vast economic benefit. “That finding is so universal as to be irrefutable,” Porter says.

A study by University of Akron professor John Zipp examined the amount of taxable sales in Florida communities that hosted spring training in 1995, when the baseball strike caused teams to field second-rate “replacement players” and there was a 60 percent drop in Grapefruit League attendance. If spring training had a major financial impact on those communities, they should have suffered tremendously. That didn’t happen, and in fact, their taxable sales increased. Those findings “may indicate that spring training is not the major tourist draw that many claim,” Zipp wrote in a paper published by the Brookings Institution.

Porter says studies that tout the positive economic impact of spring training – typically commissioned by state and local governments – do so by asking fans at games how much they spend while they’re visiting, then multiplying that figure by the number of people who attend games. That method is flawed, Porter says, because it doesn't account for money spent locally that actually goes to the team and leaves the area, such as ticket sales or stadium advertising purchased by local businesses.

“Essentially you bring a team into the community, you’re not charging them anything for rent, and you’re inviting them to sell things to your community,” Porter says.

Critics also say many people visiting Florida for spring training would visit the state anyway, regardless of baseball, just to enjoy its warm spring weather. Furthermore, assuming the estimates of spring training's impact are accurate, it's still a relatively small sum. In 2010, Florida had taxable sales of $281.5 billion statewide. The sales reportedly generated by spring training represent less than a third of a percent of that total.

“Baseball is important, but it’s a very small flash in the pan of our entire tourist industry,” says Bigelow, of Lee County. “To throw so much money and effort behind it, for such a small component of what attracts people here, is very short sighted and does not benefit our economy at large.”

www.governing.com/blogs/view/The-Economics-of-Baseballs-Spring-Training.html

[PowerBoater69]

So what's plan b?

Take over the Astros old ballpark in Kissimmee, a very nice little park, but without anything special around the park. Or move in with another team in an existing park, only issue here is that most of the teams mentioned to be looking to partner up are in the NL East.

[OldNatsFan]

I used to go to a lot of Astros games there before the Nats came to Viera. I liked that little park. There were  a lot of cheap motels nearby and a couple miles away was a Hooters. I wish they could stay in Viera but this would be my second choice.

[PowerBoater69]

The Orlando Sentinel comes out firmly against the proposed ballpark deal, saying the offer on the table "isn't even close" to being worth considering.

I'd love to see what promotional efforts the Nats are offering that they consider to be worth $650,000 per year in lieu of cash. Almost certainly nothing more than the printing of the spring training season ticket renewal packages and the web site design to advertise group trips. No chance they're paying for media ads to promote Kissimmee other than to watch ballgames.

If anyone from Osceola is reading this, I'd suggest Googling up the Nationals black tie events at the Gaylord National hotel, immediately after the hotels and restaurants of DC agreed to fund the $600 million ballpark, the team started taking their annual dinners to a hotel in Maryland.

Call it a tale of two stadiums: Proposals are pending to build a downtown soccer site in Orlando and a new spring training complex in Kissimmee.

And while neither qualifies as the best or worst of plans, there are notable differences as far as taxpayers are concerned. The most important one — how much the teams would contribute to construction costs — makes the soccer stadium a far better deal.

In Orlando, plans call for a $110 million, 18,000-20,000-seat venue so that the minor league Orlando City Lions Soccer Club can move up to Major League Soccer. The proposal for Kissimmee is to build a $98 million, 8,600-seat stadium and complex to become the new preseason home of Major League Baseball's Washington Nationals, who are planning to bug out of their current base in Viera.

The financial details behind both plans are complex, but here's the bottom line: Lions owners have offered to put up $30 million for construction. Nationals owners have offered, well, nothing.

For the soccer stadium's first, $85 million phase, the balance would come from $20 million borrowed by Orange County, to be repaid with tourist tax collections; $20 million worth of land and tax revenues from Orlando; and $15 million generated by stadium operations. Local leaders would try again to persuade the Legislature to expand a sales tax break for sports facilities to provide enough funds to complete the stadium.

For the baseball complex, Osceola County would use $38 million in reserves and unspent funds from other projects and $10 million in state funds. It would borrow the balance, about $50 million, and repay the debt from tourist tax revenues. If you're keeping score, that's taxpayers $98 million, Nationals 0.

In fact, the debt incurred for both projects would raise the overall contribution from taxpayers, because it would be repaid with interest. But Osceola would be digging more than twice as deep as Orange, even though it has shallower pockets. Osceola's tourist tax generated $34 million last year, compared with Orange's $175 million.

The Nationals are promising a promotional effort for Osceola County that the team has valued at $650,000 a year. And it will pay $500,000 a year in rent, though that's $250,000 less than it's been paying in Viera. Neither provision would significantly lighten the load on taxpayers. They're peanuts compared to the $70 million entry fee for MLS that Orlando City's owners have said they'll cover.

Though there's always room for improvement, Orlando and Orange leaders have a good stadium proposal to work with. Osceola leaders aren't even close.

http://www.orlandosentinel.com/news/opinion/os-ed-baseball-soccer-stadiums-20130726,0,7690847.story

[PowerBoater69]

Reports are that Osceola Chamber of Commerce President David Nolan has resigned...This appears to be one of a series of maneuvers being made to clear the way for the ballpark to be approved.

Local TV station WFTV is implying that I was right to be suspicious of Nolan's resignation.  Isn't it convenient for Mr. Lerner that the guy who was against spending road money on the ballpark has been replaced by a guy who supports the deal.

The president of the Kissimmee-Osceola County Chamber of Commerce has resigned. The resignation came just three days after WFTV reported on a confidential letter president Dave Nolan sent to his board calling the Washington Nationals' stadium deal the worst financial deal he has ever witnessed. Nolan said in an email that he did not want to comment on his resignation.

Mark McHugh, chairman of the board, said he was not forced out.  "Dave has years and years (of) experience in sports marketing and sports venues. I respect his opinion, and his opinion will be part of what we consider when the board meets," said McHugh.  McHugh said he has not yet taken a position on the stadium, but he did indicate support for the deal. "We'd love to see a deal here. I think the Nationals are a wonderful organization. They would weave themselves into the fabric of the community," McHugh said.

http://www.wftv.com/news/news/local/dave-nolan-kissimmee-osceola-chamber-commerce-pres/nY7KH/

[TigerFan]

I really wonder how much money is being traded under the table to get this thing passed. 

And why can't I ever be the decision maker that gets his palms greased a little bit 

[Mattionals]

Nolan sounds like Davey, lol.  Years of experience in sports marketing and sports venues, but as soon as he dislikes the deal, he resigns.  Looks a lot like Eckstein and Davey, haha.

[PowerBoater69]

I really wonder how much money is being traded under the table to get this thing passed. 

And why can't I ever be the decision maker that gets his palms greased a little bit 

I'm wondering about the logistics of a bribe. Does a trusted insider get on a plane with a bodyguard and a suitcase full of money?  Do they drop a debit card in the mail?  Paypal? Probably a shell corporation makes a large purchase from the beneficiary.

[Displaced Bucco]

I'm wondering about the logistics of a bribe. Does a trusted insider get on a plane with a bodyguard and a suitcase full of money?  Do they drop a debit card in the mail?  Paypal? Probably a shell corporation makes a large purchase from the beneficiary.

Too bad you thought about this after WTOP's ask the governor segment today!

[HalfSmokes]

Too bad you thought about this after WTOP's ask the governor segment today!

in virginia, it's easy- give them a gift and report it and everything is legal

[PowerBoater69]

Another article on the park from the Orlando Sentinel, nothing new here, some quotes for and against the ballpark.  Some professor says that it's probably not a good financial deal for the county but that they'll build it anyway because the sports franchises always win.

http://www.orlandosentinel.com/os-osceola-spring-training-prospects-20130731,0,3769036.story

[PowerBoater69]

Here's the email from the Chamber of Commerce President who soon after hitting the Send button resigned suddenly and without explanation.

Edit: The guy who provided the email to the blogger who published it has added a comment regretting having forwarded it along as he is in favor of the ballpark deal.

From: Dave Dave@kissimmeechamber.com
Sent: Friday, July 19, 2013 2:35 PM
To: ...
Subject: Spring Baseball Information
Our request to postpone a decision on spring baseball was accepted by the Commission. On August 19th a final vote on the question of investing in spring baseball will be made. Between now and our upcoming Board meeting I would like to keep you abreast of developments. In addition, when I was hired as your president, the hiring committee made it clear to me my experience was a key factor in my selection. For those not familiar with my background, relative to this communication, this is my fourth position as president/CEO having served as president of CVB’s in Toledo, Milwaukee and Cleveland. I have founded and served on boards of Sports Commissions and have direct experience in developing sports facilities’ for the Brewers, Cleveland Browns, Indians and Cavs. I have also observed minor league exposure with the Toledo Mud hens. As a Sports Commission board member and president of the Cleveland CVB I was intimately involved in both amateur sports and professional sports. During my Marriott career of 13 years I was named “Sports Executive of the Year” for Marriott international. More on this later.

The Commission has reported the baseball investment to be limited to $98 million dollars. However, our analysis would suggest the real investment number to be $279 million dollars. Below is the outline: (30 years)

1. Upfront Funds for use……………………………………$38 million, Tourist Development Tax
2. General Funds……………………………………………….29 million, Projects delayed are extensive, including the widening of Poinciana Blvd.
3. Operating Losses ( $2.3 million annually)……………..69 million ( OHP currently losses $1.9 million annually)
4. CEP Expense ( $ 1 million annually)…………………….30 million
5. Debt Service…………………………………………………124 million
6. State investment credit………………………………………11 million

Total Net County $ 279 million.


B. Word on Nationals owner ( God Bless him)

Theodore N. Ted Lerner (born October 15, 1925 in Washington, Managing principal owner of the Washington Nationals<]http://en.wikipedia.org/wiki/Washington_Nationals> baseball team. As of September 2012, Ted Lerner is number 100 on the Forbes 400 list, and number 344 on Forbes “The World’s Billionaires List” with an estimated net worth of US$3.9 Billion.[2]http://en.wikipedia.org/wiki/Ted_Lerner#cite_note-2[3]http://en.wikipedia.org/wiki/Ted_Lerner#cite_note-3 The majority of Lerner’s wealth was generated by Lerner Enterpriseshttp://en.wikipedia.org/wiki/Lerner_Enterprises, the real estate firm he started in 1952, with a $212 loan from his wife. The company is the largest private landowner in the Washington, DC area, with a wide portfolio of commercial, retail, residential and hotel properties, as well as Chelsea Piers in New York.[4]http://en.wikipedia.org/wiki/Ted_Lerner#cite_note-4


C. Word from your president

* Amateur sports investments is being made in nearly every big to medium size city in America. Yet the total market for sporting events, although on the rise, does not compare to supply.

* Sports marketing pros are seeing “parity” in facilities across the County. Bid fees for tournaments are producing much alarm.

* Economic Development Pros would say that Ballpark development can only be justified tied to being a catalytic project tied to specific business development. Also the sports venue must prove year round demand that stimulates jobs and housing and service/business industry growth.

As your president, you hired me to provide you with information to make good decisions. Thus I will do so. Obviously, on our Board day policy decisions will be made by leadership and I will follow your direction. My experience this is the worst financial deal I have witnessed. My experience in both amateur sports and professional sports tells me this in a losing proposition in consideration of financial cost and loss of opportunity. I can tell you that projects on the drawing board are MUCH, MUCH better than this opportunity. Our future bonding capacity will not tolerate another major project.

As Board members, your staff will continue to update you on developments, both pro and con. Finally, as acknowledged in our board meeting, this insight has nothing to do with the County Manager and his team. They have done their job and have done it well. We have the highest respect for the effort. In turn, I’m doing my job and our board will also, very soon.

Thank you. DAVE

Dave Nolan

President/CEO

Kissimmee/Osceola County Chamber of Commerce

http://ksib.net/index.php/carl-cricket/2013/08/colt-may-be-coming-hotel#c30160?utm_source=twitterfeed&utm_medium=twitter

[GburgNatsFan]

Holy crap.

Gotta say, he's got the experience to make this assessment.

Here's the email from the Chamber of Commerce President who soon after hitting the Send button resigned suddenly and without explanation.

Edit: The guy who provided the email to the blogger who published it has added a comment regretting having forwarded it along as he is in favor of the ballpark deal.

http://ksib.net/index.php/carl-cricket/2013/08/colt-may-be-coming-hotel#c30160?utm_source=twitterfeed&utm_medium=twitter

[PowerBoater69]

The link below is from a radio discussion on the ballpark proposal, here are the key points:

Spring training parks cost $8,000 per seat and are typically 10,000 seats, so the Nats design is in line with the market rate.

These parks are worth the money if if brings in money from out of town.  Local fans just move money around the county, they need visiting fans, which is a high percentage in spring training.  Osceola's problems are that most of the visiting fans will actually stay and eat in Orange County and that the Nats will be pulling their profits out of the community.  So the local businesses will see very little benefit from this deal unless the county can convince people to stay in town rather than up the road at Disney.

Bottom line is that the $98 million price tag is too high, they should try from something cheaper like refurbishing OCS or letting baseball go and spending their money on alternative projects.

http://www.wmfe.org/site/News2?page=NewsArticle&id=14863&news_iv_ctrl=1521

[varoadking]

...let baseball go and spending their money on alternative projects.

I'd bet money on this...

[PowerBoater69]

I'd bet money on this...

I'm not so sure, the Nats somehow managed to get their primary opponent to quit his job, so I wouldn't count them out, and as one of the professors quoted in one of the articles that I posted said, the teams always win. Although the next article I'm about to post is another shot against the ballpark.

[varoadking]

All those bluehairs in the trailer parks are gonna rise up and shoot this down once they read about it on the bulletin board at the Golden Corral...

[PowerBoater69]

The Orlando Sentinel reports on a new study that based on very conservative estimates does not support the building of the new ballpark.

Osceola County's bid to build a $98 million spring-training complex for the Washington Nationals would cut deeply into tourism-marketing funds essential to growing the county's main industry, new financial projections show.

The estimates, prepared by the county's staff, show that if commissioners approve a deal Aug. 19 to bring the Nationals to Kissimmee from Brevard County, Osceola could soon face an annual shortfall of nearly $7 million for its convention and visitors bureau, known as Experience Kissimmee.

The funds are used to promote Osceola as a destination for vacationers, youth sporting events and conventions.

"Essentially, it's saying you're going to starve the CVB in order to have the Nationals in Osceola County," said Kriss Titus, executive director of the Kissimmee Tourism Education Association. "Tourism is our No. 1 industry in Osceola County, so I don't think we want to kill the golden goose."

With financing costs included, the Nationals deal would require Osceola to commit $174.8 million in tourist-tax money from 2014 until 2044. It likely would siphon money from other tourism-related projects, such as improvements to Silver Spurs Arena and Austin Tindall Regional Park.

...

But the report bolsters leaders of the county's tourism industry who say the proposal has much risk and no guarantee of reward. One risk of underfunding the visitors bureau is that less marketing money could result in a downturn in tourism business that would erode future tourist-tax collections.

"This could get on a downward spiral in a big hurry," said Mark Miller, owner of the Arabian Nights dinner theater. Miller said he worked with County Manager Don Fisher to compile the numbers, which turned out even worse than he had expected.

Oh this is lovely, the Nats will move in, the hotels will go belly up, so we'll have to stay out of town and tell the kids to roll up the windows and lock the doors when we head to the games.  On the plus side it will be kind of nostalgic for those of us who's Dads drove us up to games at Memorial Stadium growing up.

[Harford] said the report assumes that growth will be similar to a period in which tourism was hurt by the Sept. 11 terror attacks, four hurricanes and a nationwide recession.

As opposed to the upcoming three decades which will be problem free.  Nice to know.

[Harford] said the study doesn't account for the importance of putting Osceola in front of affluent fans of the Nationals, an important link to the nation's capital.

It's good to be an affluent fan.

The Nationals declined to comment.

As billionaires are wont to do when they are requesting $98 million in corporate welfare.


http://www.orlandosentinel.com/news/local/osceola/os-osceola-nationals-stadium-tourism-20130807,0,2463935.story