P-Nats Stadium Deal. Home Run. Strike Out?

Transcription

1 P-Nats Stadium Deal Home Run or Strike Out? 1

2 Full Disclosure I am a Washington Nationals fan and have been to several P- Nats games A new stadium would be a nice to have and there is pride in owning a stadium But my job as Supervisor is to protect the taxpayers of this County 2

3 So What are the Key Issues? 1. County Priorities 2. Protecting the Taxpayer 3. Economic Development Impacts 4. Giving the Citizens a Voice 3

4 County Priorities Every decision we make has to be balanced with all the needs of the County Stadium 4 Schools Public Safety Transportation Parks BPOL Phase Out Increased Taxes

5 The Best Deal for Taxpayers The taxpayer will be on the hook for a $35,000,000 minor league baseball stadium What are the risks? Growing and growing costs Location of Parking Garage Bond rating impacts and Debt Ceiling Taxpayers are the safety net 5

6 Growing and Growing Costs Actual Cost of Stadium Construction MiLB avg. construction cost is $7,600 to $11,000 per seat P-Nats estimate at $6,750 per seat ($31m) Estimated cost of P-Nats stadium at mid-point ($8,900 ps) = $44.2m (2018) (42.6% increase) Experts estimate that the P-Nats would need to spend over $44m to bring in the projected revenue Actual Cost of Parking Garage 6 P-Nats estimated the cost at $21 million Actual cost estimate is $32 to $35 million (66.6% increase)

7 Growing and Growing Costs Additional Costs to County Taxpayers Off-site improvements estimated between $4.7- $5.9 million OFF-SITE ROAD IMPROVEMENTS WILL ONLY COVER THE ADDED TRAFFIC OF THE STADIUM AND GARAGE WILL NOT IMPROVE CURRENT SITUATION On-site improvements estimated at $1.4 million Estimated Payment to Taxpayers Could be as high as: $7,300,000 7

8 Location of Parking Garage County Transportation Staff has already declared that this is not the optimal location for the parking garage We can take the money from the State and build one over at the NOVA campus most likely cheaper We are trying to shoe-horn the parking garage into this location 8

9 Bond Rating/Debt Ceiling Financing this deal through the IDA or through general obligation bonds WILL impact our Triple AAA Bond Rating Debt Ceiling Alert 9

10 Taxpayers Are the Safety Net In the end, the taxpayers will be the ones who backstop this deal The P-Nats have offered 1 Year reserve account which is not enough No signed guarantee by the P-Nats or JBG to protect the taxpayers No signed guaranteed by the Carolina league that they will cover the lease payments if something happens to the P-Nats 10 Average stadium lease payment is between $250,000- $350,000 (P-Nats lease is projected at $2,400,000)

11 Economic Development Impacts Do MLB stadiums generate new economic activity? 11 Many expert economists say NO Cannibalizes existing businesses Professor Humphreys from West Virginia University has studied new stadium deals around the country and calls it the Walmart effect Stadiums over time pull dollars away from local businesses Opportunity Cost Loss for the private sector like Top Golf

12 Giving the Taxpayers a Voice Let s give the taxpayers a chance to decide if we do this stadium deal through a public referendum This is possible by changing the financing from IDA Bonds to General Obligation 12

13 Giving the Taxpayers a Voice IDA Bonds IDA bond will require PWC to guarantee against any default Bond counts with rating agencies Bond amount counts against bonding limits Public Referendum General Obligation bonds backed by PWC against any default Bond counts with rating agencies Bond amount counts against bonding limits Why IDA vs. Public Referendum? 13

14 IDA vs. Public Referendum 14 IDA Bonds Requires a bond validation suit with expenses toward hiring consultants Any citizen can object Court expedites Any party can appeal automatic to Virginia Supreme Court Timeline: 3 months to 1 year Public Referendum Vote is in November