Potomac Nationals New Stadium - Fredericksburg!

[NJ Ave]

This just really seems like an awful deal for PWC.

I don't know much about this battle, but why is it such a bad deal for PWC? They issue the bonds, but the team pays the debt service? Seems like an okay compromise at first glance.

[HalfSmokes]

I don't know much about this battle, but why is it such a bad deal for PWC? They issue the bonds, but the team pays the debt service? Seems like an okay compromise at first glance.

The bond issuer has ultimate liability for default (there may be more reasons that it's bad, but that always jumps out with these arrangements)

[NJ Ave]

The bond issuer has ultimate liability for default (there may be more reasons that it's bad, but that always jumps out with these arrangements)

But the team has been there for 35 years right? Has there been speculation that their finances cannot absorb $3 million a year in rent and debt service costs? Or is the county close to its debt limit and this will preclude it from issuing bonds to cover other investments?

I don't know, I'm no huge fan of publicly funded stadiums, but this seems like a gray area. You're not servicing the debt by increasing taxes (like the business tax around Nationals Park). The team is paying to service the debt. So unless this will (a) bump the county up against its debt limit, (b) negatively affect the credit rating for the county, or (c) there's a reasonable concern about the team's ability to repay over the life of the bonds, I don't understand the issue.

[NJ Ave]

I mean, this is what the former County planning director said in that article - my comments bolded: "In an interview Thursday, Snyder said the deal is a “bad” one for the county, mostly because the shopping center will retain ownership of the land (why would the County gain ownership of land that the PNats are reimbursing the rent for?) and hike the rent 10 percent every five years (which is something like a 1.5% increase if applied annually, which seems fairly friendly actually), totaling more than $17 million over the life of the lease."

[HalfSmokes]

It depends on the fine print, if there are assumptions that will require the county to assume the costs if not met (this seems common in stadium deals) or if it's structured so that the team could move and leave another entity which would then default on the hook (again pretty common) then its bad. I certainly don't trust owners saying the deal doesn't cost the county anything

[mitlen]

It depends on the fine print, if there are assumptions that will require the county to assume the costs if not met (this seems common in stadium deals) or if it's structured so that the team could move and leave another entity which would then default on the hook (again pretty common) then its bad. I certainly don't trust owners saying the deal doesn't cost the county anything

I don't know much about economics but your last sentence is spot on.

[imref]

From what I've read, the big concern is that the County is on the hook if the team can't meet its obligations.    I haven't seen break-even analysis showing what they'd need to draw to turn a profit.  Historically the P-Nats draw about 3k a game to Woodbridge.  The new stadium is further away for much of the fan base that comes from western PWC, but moves them closer to more highly populated areas in the eastern half of the county.

[imref]

FWIW:

https://sheriffofnottinghampwc.blogspot.com/2017/02/why-would-pwc-bocs-approve-multi.html

At 2 PM on March 7, the Board of County Supervisors will finally allow the public to see the product of more than eight months of negotiations (also known as a "Hose Job" on Prince William County taxpayers) on the proposed brand-spanking-new Potomac Nationals Minor League Baseball stadium.

Taxpayers will finally get to see what is being called the latest "Letter of Intent" that will outline the Taxpayer Funded Bail-Out using taxpayer money to subsidize the "Field of Dreams" that the Potomac Nationals owners have been trying to pitch to everyone who would listen for years.

The problem for Mr. Silber, the owner of the Potomac Nationals, is that every pitch he has reportedly made to every bank, lending institution, and every surrounding County in northern Virginia -- even in Maryland -- was deemed a wild pitch by every group he tried to convince to hand him a taxpayer funded bail-out.

Why?

The project is a dog.

The numbers just do not add up, and banks first and foremost look to the ability of a borrower to repay the loans.

In this case, the problem for the Potomac Nationals is that there is not much of a market for a defaulted Minor League Nationals baseball stadium where a bank could recover its investment if and when the borrower goes belly up.

A foreclosure on a house is bad enough, but a bankrupt stadium?

The financial linchpin of the stadium project relied upon being able to find a "Name Sponsor" who would poney up millions of dollars to have their business name put on the new stadium for everyone to see.

Art Silber promised over-and-over-and-over-and-over-and-over-and-over that he was about to hold a press conference to name the new name sponsor.

It never happened.

Why?

The project is a dog.

Businessman are like bankers: They want to see a return on their investment. They want to make a good deal. They do not want their business name associated with a failure.

Rumors have been flying for weeks that the Board of County Supervisors, after 18 months of negotiating, that Birdies at McCoart described as wrestling with a greased up pig, had finally put their foot down and said here is our "Best and Final Offer."

Make no mistake. That "Best and Final Offer" was also a dog for the taxpayers of Prince William County, but the majority of the Board of County Supervisors were apparently willing to lie down and play dead and hand over millions in taxpayer money to subsidize a bailout for the Potomac Nationals.

In the business world, after protracted negotiations that have failed to produce an agreement, a Best and Final Offer is just that.

Take it or leave it.

If you "leave it" then the negotiations end. The party is over.

These kinds of negotiating tactics are used when everything else has failed to produce an agreement, the party who is the recipient of the Best and Final Offer is viewed by the entity making the offer as being unwilling to make a reasonable deal, and one final last-gasp offer is made to signal the recipient that there will be no more negotiations.

But Art Silber apparently laughed at the Best and Final Offer, and sent back a laundry list of additional changes he was demanding -- all to his benefit, and all to the detriment of the taxpayers of Prince William County.

The Board of County Supervisors apparently is renegotiating the terms of their "Best and Not-So-Final Offer."

This whole mess has become a very bad and very expensive joke on every taxpayer in Prince William County.

What concerns The Sheriff the most about this whole sordid negotiation -- assuming one can call capitulation to the rich owners of the Potomac Nationals a "negotiation" -- is the silence of those on the Board County Supervisors who are supposed to be taxpayer advocates.

Where are Ruth Anderson, Pete Candland, and Jeanine Lawson?

Why is there no transparency or accountability being called for?

Each claims to be a protector of the taxpayers, and each has been a vociferous advocate for keeping tax rates low.

But the word is that Chairman Corey Stewart has been putting the squeeze on every member of the Board to ram through the stadium deal as a "payback" for his big bucks campaign contributor, Art Silber.

Stewart has constantly invoked the rule in Closed Session to not reveal any of the terms of the ongoing negotiations as a ruse to continue to leverage and beat up on his fellow Supervisors to wear them down with one reconfigured proposal after another.

This is not a negotiation any longer, and has not been one for a long, long time.

It is a secret beat-down to get the opponents to the deal to capitulate and not make a stink that would be politically damaging to Stewart or the rest of the stadium supporters.

In the business world, it is almost a Trump-like negotiating tactic.  There is absolutely nothing wrong private companies with using tricks and misdirection to bamboozle the person you are negotiating with on the other side of the table.  These negotiators have to answer to their stockholders.

But when there is taxpayer money involved, there should be a higher standard of transparency and accountability.

And the Board of County Supervisors should be accountable to taxpayers for their negotiations.

In this negotiation, there is no such accountability.

Birdies at McCoart do report that the only reason the issue is going to be brought to the public is that Supervisor Candland finally said he would no longer participate in any further Closed Session meetings on this issue.

If early reports are true, the latest proposal is for taxpayers to underwrite millions of dollars in site preparation, road construction, and the construction and operation of a parking garage that are essential parts of the new stadium deal.

Another thing the taxpayers should look closely at is the cost estimates for both the stadium and parking garage. According to the independent financial analysis paid for by Prince William County taxpayers -- to the tune of about $100,000 -- the Potomac Nationals are significantly understating the cost of construction for these facilities, and overstating the revenues that they intend to generate from the new stadium.

That would explain why every bank or lending institution slammed their door on Art Silber.

That puts Prince William County taxpayers at an unacceptably high risk to underwrite and guarantee the bonds required to construct this "Field of Dreams" for Art Silber.

To cover that glaring financial shortcoming, advocates for the new stadium want taxpayers to believe that this will be an essential addition to amenities in Prince William County the taxpayers want and need.

They are trying to make this a County project to justify putting County funds at such high risk.

Indeed, there will be events held at the new stadium for the wine and cheese crowd in the County.

Of course, that same wine and cheese crowd can be found at Jiffy Lube Live.

The difference, of course, is that Jiffy Lube Live is a private for-profit organization that is not bleeding millions of taxpayer dollars to subsidize its operations.

In short, there is no bail-out over at Jiffy Lube Live.

But then, the owners of Jiffy Lube Live probably did not think to send a bunch of money to Chairman Stewart's campaign account.  Then they could have raked in millions in taxpayer-funded subsidies, become a County amenity, and bought a limo to take all their money to the bank.

Just a thought:  Perhaps shelling out millions of dollars for a fancy new Minor League Baseball Stadium would be better spent on building classrooms for overcrowded schools that are within a stones throw from the proposed new stadium site. Those would be the schools where many of our children are being educated in trailers.

[NJ Ave]

From what I've read, the big concern is that the County is on the hook if the team can't meet its obligations.    I haven't seen break-even analysis showing what they'd need to draw to turn a profit.  Historically the P-Nats draw about 3k a game to Woodbridge.  The new stadium is further away for much of the fan base that comes from western PWC, but moves them closer to more highly populated areas in the eastern half of the county.

Hmmm good stuff. It does seem like $3 million a year would break the spreadsheet considering you're talking about ~200,000 attendance a year. You would need to generate $50 per person to even get to the point where debt service and the lease were even 30% of total gate revenues. $50 per person at a single-A park sure seems like a lot of $1 hot dogs.

Frankly the whole set up is ludicrous. Every major league owner cries poor because the vast majority of their profits are unrealized in the form of rapidly appreciating teams. These guys are making like 15% of unrealized gain per year on their teams, and still bilking taxpayers for hundreds of millions. Obscene.

[dcpatti]

FWIW:

https://sheriffofnottinghampwc.blogspot.com/2017/02/why-would-pwc-bocs-approve-multi.html

That hurt my eyes. Is the author being sponsored by the National Association for the Advancement of Carriage Returns?  I'm sure there are plenty of good facts in there, and valid viewpoints, but that page is just hard to even look at!

[imref]

That hurt my eyes. Is the author being sponsored by the National Association for the Advancement of Carriage Returns?  I'm sure there are plenty of good facts in there, and valid viewpoints, but that page is just hard to even look at!

It's a fairly well read conservative-leaning blog about PWC politics.  Not sure who writes it but it always appears as if he's got inside info.  There used to be a competing blog called the Prince William Muckracker, but that one stopped being updated late last year.

[imref]

Hmmm good stuff. It does seem like $3 million a year would break the spreadsheet considering you're talking about ~200,000 attendance a year. You would need to generate $50 per person to even get to the point where debt service and the lease were even 30% of total gate revenues. $50 per person at a single-A park sure seems like a lot of $1 hot dogs.

Frankly the whole set up is ludicrous. Every major league owner cries poor because the vast majority of their profits are unrealized in the form of rapidly appreciating teams. These guys are making like 15% of unrealized gain per year on their teams, and still bilking taxpayers for hundreds of millions. Obscene.

Good points.  I assume that's why selling the naming rights was so important (and why Silber's failure to sell them delayed the stadium and forced him to go to the county to back the project).  I'm hoping they work something out as I attend 3-4 games a year and always have a good time, even at Pfitzner.  I just don't want to see the County left on the hook for covering the bonds if revenue projects fall short.  The Sheriff blog makes good points that PWC could better spend the money on schools and that it's a red flag that Silber wasn't able to secure private backing.  This is a county that's in the middle of a dogfight over the size of the next high school and whether not it can afford to spend ~$10 million or so to increase its capacity by ~500 students.

[Natsinpwc]

http://www.insidenova.com/headlines/update-potomac-nationals-stadium-gets-initial-prince-william-county-approval/article_bef8f4bc-03b4-11e7-b065-7374204690da.html

[imref]

Similarly, she also warned that a consultant’s report on the stadium indicated that the P-Nats might be underestimating its cost if they want to make enough money to fully pay back the county. Instead of the $35 million the county is ready to raise, the consultants’ analysis suggests that similar stadiums cost more than $45 million — if they prove to be right as the design process unfolds, Attreed noted that the county could still back out of the deal.

Candland is my supervisor, he's a good guy and very very fiscally conservative.  I trust his judgement that this is a bad deal and a bad use of funds in a county that is dealing with massively overcrowded schools.

[Natsinpwc]

Candland is my supervisor, he's a good guy and very very fiscally conservative.  I trust his judgement that this is a bad deal and a bad use of funds in a county that is dealing with massively overcrowded schools.

Majority rules. Play ball.

[imref]

This says vdot turned down the grant request for the commuter garage that would double as a garage for the p-nats. I haven't seen it confirmed anywhere else:

http://sheriffofnottinghampwc.blogspot.com/2017/03/chairman-stewart-and-supervisor.html

[imref]

http://www.fauquier.com/prince_william_times/news/candland-stadium-deal-needs-to-go-to-referendum/article_9006700a-2c1b-11e7-8a58-2f6f391fee19.html

[imref]

Candland's push for a referendum failed on a 4-4 vote. chairman Stewart, a republican, is lobbying for the stadium against his fellow republicans. Silber is reportedly backing Stewart's run for governor.

They are funding another study though. http://www.insidenova.com/headlines/prince-william-to-spend-k-more-for-p-nats-stadium/article_ff580d1c-1f21-11e7-abfd-4b324b89a963.html

[Natsinpwc]

Candland's push for a referendum failed on a 4-4 vote with chairman Stewart casting the tie breaking vote. Silber is reportedly backing Stewart's run for governor.

They are funding another study though. http://www.insidenova.com/headlines/prince-william-to-spend-k-more-for-p-nats-stadium/article_ff580d1c-1f21-11e7-abfd-4b324b89a963.html

Build it and they shall come.

[RiotAct]

That hurt my eyes. Is the author being sponsored by the National Association for the Advancement of Carriage Returns?  I'm sure there are plenty of good facts in there, and valid viewpoints, but that page is just hard to even look at!

Would you prefer the entire article in a single, really-long paragraph?

[Natsinpwc]

http://www.insidenova.com/news/prince_william/ballpark-financing-prince-william-leaders-split-on-ballot-pitch/article_9d656078-34c5-11e7-9ec1-d7dd78f1f0be.html

[imref]

County Board of Supervisors to vote June 20 on whether to hold a referendum in November on bonds for the new stadium

http://www.insidenova.com/news/prince_william/p-nats-stadium-supporters-pitch-value-opponents-fret-over-liability/article_8955dcc2-3cb1-11e7-9fd8-33a081ea7564.html

Meanwhile there's an alternative idea:
https://sheriffofnottinghampwc.blogspot.com/2017/05/the-sheriff-of-nottingham-proposes-32.html?m=1

[imref]

Silber with lots of threats:

http://www.insidenova.com/news/politics/prince_william/potomac-nationals-stadium-deal-can-t-wait-on-november-referendum/article_02833320-4f80-11e7-a90b-93738296f959.html

[comish4lif]

Proposed P-Nats Ballpark Referendum Rejected

In a vote, Prince William County supervisors rejected a motion to place a proposed Potomac Nationals (High A; Carolina League) ballpark plan on the November ballot.

http://ballparkdigest.com/2017/06/21/proposed-p-nats-ballpark-referendum-rejected/

[imref]

according to financial docs, the P-Nats have made about $45,000 in total profit over the last five years.  This is why they can't get private funding for a stadium.

https://sheriffofnottinghampwc.blogspot.com/2017/06/shocking-financial-statements-show-p.html