Shockoe Center backers need fans to spend
Paying for a ballpark in Shockoe Bottom will require free-spending fans, according to financial projections from the developers.
The developers are counting on a little less than $1.2 million a year from taxes on tickets, fans' food purchases and souvenir sales at the stadium to help finance a new facility, spokesman Peter Boisseau said yesterday.
That's a lot more than could come from the $5 to $7 developers expect to charge for most tickets for minor-league games. The Richmond Braves charged $5 for youth tickets and $7 for adult tickets before they moved to suburban Atlanta.
The Bowie (Md.) Baysox, the nearest team in the league most likely to include a Richmond team, charge $6 for general-admission youth tickets and $9 for general-admission adult tickets. Bowie also sells reserved seats for $11 to $14.
With a city ticket tax of 7 percent and the developers' earlier projections of 5,500 paid attendees per game, a typical Double-A team's schedule of about 55 home games would generate less than $150,000 in ticket taxes from about $2.1 million in revenue. The Braves averaged 4,455 fans at home games last year in their final season.
Boisseau said the developers expect to generate a total of $432,453 a year in ticket-tax revenue, from minor-league games as well as Virginia Commonwealth University and high school games and special events.
That means selling $4.1 million a year of tickets to the college and high school games as well as the special events.
In addition to ticket-tax revenue, developers expect food sales to generate about $366,000 in tax revenue. If that came only from minor-league games, that would translate to an average of $12.74 in food purchases per fan.
Tax revenue from sales of souvenirs and other items at the ballpark should amount to $351,892 a year, Boisseau said. If that came only from minor-league games, that would translate to an average of $33 in purchases per fan.
Taxes from the ballpark are only part of what would finance a $318 million Shockoe Center development that would include offices, stores, restaurants, condominiums, apartments and hotels, in addition to the ballpark.
The developers expect nearly $6.5 million a year could come from taxes generated from those nearby buildings.
They expect about $800,000 would come from parking fees and rents, including a $250,000-a-year lease payment from a minor-league team.
Paul W. Kreckman, vice president of Highwoods Properties, the leader of the developers, said the group still believes all the taxes and rent revenues still make a strong base to finance the project.
A report this week by the city of Richmond's financial consultant, Davenport & Co., said the developers' original financing proposal wasn't feasible but added that the deal might work with a city guarantee.
"The Davenport report confirms our concept that the new tax revenues would be sufficient to pay off the bonds without costing the city any existing tax dollars," Kreckman said.
The report said annual payments on city-guaranteed bonds would be at least $2.1 million less than tax revenues from the project. But though that means that a guarantee isn't likely to mean the city would end up paying taxpayer funds to back the project, it would limit the city's ability to borrow for its own projects, Davenport said.
Boisseau said developers aren't asking for a guarantee, though he said that would be the simplest way of financing the project.
He said the group is exploring other options, including using federal stimulus funds.
Some stimulus money already is headed for the Bottom -- the GRTC bus system plans to use much of the $13.8 million it is getting to help pay for a downtown transfer station in the train shed behind Main Street Station.
The shed is a historic building, and its renovation would generate tax credits from the state -- the same kind of credits the Shockoe Center developers once had considered as a source of funds for their project.
Boisseau said it might be time to re-examine using credits to help pay for the ballpark.
"We're looking at a lot of options," he said.
Contact David Ress at (804) 649-6051 or
.
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Reader Reactions
Richmond is lucky to have anything. It is not a city that is conducive to any large event spaces [built in the 1970s].
There, fixed.
Supercpa I think the evident point is ignored in your retort. Richmond is lucky to have anything. It is not a
city that is conducive to any large event spaces. Richmond is a rather midland but unique place that does not lend itself to huge Dallas size arenas or to use your analogy to DC or NYC—anything that remotely compares. I would be careful before making a comparison between art museums be they
supported by the Federal Government or the State—(taxpayers)to private
sector baseball stadiums which will most definitely shaft the tax payer and ruin the landscape (which the Museum does not). In fact the Museum which is undergoing a major expansion is one of the best Museums in the country—and it is just the kind of thing Richmond excels at—and not baseball stadiums.
Indeed, regarding your comment about the behavior of people—Richmond is lucky to have the crime and misbehavior rate it does considering that it has ranked over the years as one of the more risky places to live. Hopefully, the high speed rail will come in
a few years and you can be in DC, Balt and NYC before you know it.
Great museum?
Do we have the Smithsonian or the Museum of Modern Art here?
And this “great museum” here- is it self supporting? Who paid for its construction?
I took my family to NYC on vacation several years ago. We had no issues at Yankee Stadium. My son and I did see a public display of affection in the mens room at the Museum of Natural History that I would not consider proper in the circumstances.
BUILD IT & THEY WON’T COME
“The Dumbo of White Elephants”
Richmond not a baseball town
and it is not a true urban mart as is
Boston or Baltimore. Now the argument is well, don’t people show up for all those special events on Brown’s Island and the occasional concert—yes the occasional event yes—but baseball—real baseball is an on-going
event during season—it requires seats to be filled (unlike some outdoor folk festival). The city should promote its
history and the tourist trade—that appeals far more to retailers for the upscale and condos for the same.
Trust me—you don’t want to live around or work by a “baseball stadium”—believe me when I say after the fans have bought their hot-dogs, cracker jack—and beer they’re not going to La’diff but they may some bars—contributing further to inebriated encounters. (Watch the insurance and tax rates go through the roof)
Improvements the City has made and is making to its downtown are positive ones—although the big “arts” center is probably a misappropriation—but nothing like a “baseball stadium” This is not Washington, it is not NYC or Chicago—its a little town with a
great museum, some historical attractions and pretty parks. And that’s that—For a market like Richmond—the “Diamond” is about all that
it needs—families bring their kids to a game now and then—that’s sweet—That does not equate into a big stadium. This is the biggest white elephant Richmond has ever considered. It is the dumbo of white elephants.
Here’s the deal, if your proposals cannot stand up to the questions, and challenges of the general public?
It’s a bad use of taxpayers money. End of story. Don’t try to blow sunshine, and tell me it’s gonna be “GREAT!!“ (rolls eyes)
I’ve lived in this city all my life, and I have seen some really bad usage of funds, and this is starting to smell just like the others!
Although the figures written in the article are difficult to follow and interpret, they do not seem to add up as a good deal for taxpayers. They also seem overly optimistic and the projected tax income is less than Highwood’s projection. Now today we find Mr. Bostic basically lied a the RTD forum when asked about parking! How can we believe their other answers?
A sports complex in Richmond doesn’t need taxpayer dollars - just look at what is being planned in Chesterfield County. An olympic-style training and competition facility (http://www.sportsquest.biz) projected to cost over $100m and not using a penny of taxpayer money!
Come on, Richmond City government. Is the Shockoe baseball stadium really the “next big thing”?! Haven’t we “been there, done that” with 6th Street Marketplace, Main Street Station, Canal Walk, etc.? How many times will we continue to go down these “if you build it, they will come” paths to failure?
Let the developers put up the money if they think it’s such a wonderful thing and keep the taxpayer dollars out of it!
Richmond doesn’t need AA baseball. People in Richmond would rather play sports then pay to watch someone else do it. All the city and county softball leagues, RCSSC sports, WAKA, RVC, all the bikers in Richmond. They might as well add more taxes because as it is with the taxes as high as they are I do all of my shopping in Henrico or Chesterfield.
Supercpa, that the City exercised poor judgement and foolishly obligated tax revenue for CenterStage, does not justify repeating that travesty with respect to the Highwoods proposal which will necessitate using a minimum of 11% of the City’s credit capacity ($64,000,000).
Rather, it should stand as a sterling example of why the City’s taxpayers SHOULD NOT be obligated to support Bryan Bostic’s and Highwoods Properties private business interests.
“Paying for a ballpark in Shockoe Bottom will require free-spending fans, according to financial projections from the developers”
THERE YA GO….now…what do you think people are going to do here in Richmond….spend freely very often on a AA team?....don’t think so…
“Paul W. Kreckman, vice president of Highwoods Properties…“ - understand this….YOU pay for it, take the risk…and we will go see a few games…but we (Richmond) will NEVER support a sports team…not being negative…being REALSTIC…has Richmond EVER supported a team? Nope…but a NEW stadium will change all of that right?...puuhhlllease…
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