Wednesday, April 24, 2024

Could a baseball stadium in Leland pay for itself?

REV Entertainment Group president Sean Decker with Economic and Community Development Director for the Town of Leland Gary Vidmar at a press conference about a potential baseball stadium built in Leland. (Carl Blankenship/Port City Daily)

LELAND — With weeks of due diligence left before Brunswick County considers pulling the trigger on a publicly-funded baseball stadium in Leland, how it will be paid for is the big question.

The arrangement — building a stadium with public money so a private company, the Texas Rangers’ REV Entertainment in this case — may sound unintuitive, but the vast majority of sports stadiums are funded this way to the tune of billions of dollars.

READ MORE: Countywide bond off the table for Leland’s potential baseball stadium

Community members openly questioned the arrangement last Tuesday during a forum with REV, Leland and Brunswick County officials. They received some guarantees in exchange for their concerns: There will be no county-wide bond referendum to fund the project, despite Leland and Brunswick County entertaining the idea early on. The project will not move ahead if the revenue it generates can not service its own debt and REV will pump millions into surrounding development projects.

Exactly how much the project would cost and the details of what a financial relationship between REV and Brunswick County would be are still up in the air.  There are examples across the river in Wilmington, plus standing agreements between the Rangers and other municipalities in the state.

There are two ways to collect revenue directly from the operation of a publicly-owned entertainment venue — rent and ticket fees. In the case of Wilmington’s Live Oak Bank Pavilion and Greenfield Lake — both leased to entertainment giant Live Nation — the city collected $700,000 in rent and ticket fees in 2022.

Then there are the indirect impacts which are more difficult to quantify, like people coming in from out of town to spend tourism dollars at other businesses and generating extra tax revenue.

Mark Seaman, parks and recreation director for the City of Hickory, said traveling teams can reserve dozens of hotel rooms for a night to play at the city’s L.P. Frans Stadium, which is home to the Hickory Crawdads.

“As with anything with economic impact, there are a lot of formulas out there,” Seaman said. “Some of them are pretty good; some are a little outrageous, obviously. There’s a lot of soft economic impact that’s hard to put your finger on.”

Seaman said L.P. Frans, a 4,000-seat stadium comparable in size to the proposed 3,500-seat venue in Leland, paid back its $5 million price tag decades ago. It was built in 1993, and it has been a Rangers affiliate since 2008. The Rangers purchased the team outright in 2017.

At this point, the city functions primarily as landlord at the facility and charges $1 per year for a lease.

The city recouped its money in the facility early on by leveraging an agreement with its early tenants to charge rent, ticket and concessions fees while also maintaining the facility. Seaman, who was the team’s general manager prior to working for the city, said relationship with the Crawdads is so amicable because the reality is the facility has been “more than paid for” and the city is still reaping the commerce benefits.

He also noted there was so much enthusiasm to bring baseball to Hickory that community donations in the 1990s to help pay for the project in addition to city funds. Seaman believes local sports teams improve quality of life.

REV also touts that the venues become centers for their communities and offer a venue to host other events. Seaman agreed and said the Rangers have been good community partners. He said the Crawdads donate memorabilia to charity events and local school sports teams. Kickball leagues also use the stadium as well as the community for children’s get-togethers and private company events.

The only other Rangers-affiliated team in the state is Kinston’s Down East Wood Ducks. Grainger Stadium, which has a 3,400-seat capacity, has been owned by the city since it opened in 1949. It was built with a $150,000 bond.

Corey Povar, director of the Kinston/Lenoir County Parks and Recreation Department, said REV operates the concessions at the city’s facility. He said the city still collects rent, and the city performs upgrades on the facility, though it is reimbursed for those expenses by the Wood Ducks. The city also splits the cost of a turf management employee with the team. That employee’s only role is working at the stadium, but Povar said it’s worth it for the city.

“We’re thrilled to have a professional team here,” he said.

Port City Daily requested a copy of the agreement outlining how much rent the Rangers pay to Kinston, but did not receive the document by press.

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