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
Many thanks to the person who posted the Memphis Commercial Appeal link from 3/15/09, which endorses the argument against wasteful “pie in the sky” type spending on speculative municipal projects. Baseball in Richmond has been successful and that tradition should be continued immediately with the backing of real leadership, which there hasn’t been. In my opinion, Richmond baseball is more about family and less about product and expecting fans to bear more costs, in this economic enviroment, is a stretch. Renovating the Diamond by removing the concrete overhang that was crumbling, replacing the metal bench seating with individual plastic ones, and adding a bleacher section for students would create a new feel for the old park. Maybe a “revenue operation” fund could be set up so that in the future there is a down payment for a new stadium, but the poor condition of the locker rooms is hardly the reason for a big, brand new one. Let’s fix and renovate what we have and get back to enjoying baseball in Richmond!
The Richmond Braves drew many more in a bad year than the Richmond Ballet and the Richmond Symphony draw in a good year.
We are building CenterStage with lots of City, State, and Federal tax dollars.
The sales tax was raised and the Center will require a city subsidy every year.
Here’s an idea… If the developers think this is such a slam dunk that residents will support this stadium, why don’t they do a PSL (Personal Seat License) type of thing? That way you force these so-called fans that will patronize the park b/c they have to pay up front? If a few thousand people commit to a PSL and are forced to buy season tix it will determine whether or not this could work. If you have hardly anyone committing, then it shows that it would be a complete waste of taxpayer money and Richmond will be stuck just like the city of Memphis is with their ballpark.
Interestingly enough.. the attendance for 2008 was approx 290K.. Yeah.. I know an exiting ballclub.. a bad stadium.. But the numbers you quote for 2003 declined to the 350K or less in later years. I am not saying that the novelty of this ballpark might not bring in more fans in the beginning.. just that if you look at another team in VA.. the numbers may not add up. Guido had a good link to the problems that other team is facing. The economy is really iffy right now.. While the ball park may be “feasible”.. it sounds like success relies on some things that may not realistically happen. Plus it may need stimulus PLUS City funding and support. I am not sure that it is a good idea to forge ahead with a project that doesn’t seem to be able to stand on it’s own two feet. But I do sincerely understand that there are bball fans in richmond who want this.. just not sure there are enough with deep pockets to make it successfull.
You can’t just do a straight population comparison. In 2003 the Braves pulled about 440k in attendance, and I doubt the population was what it is today. Conversely, the attendance in 2008 for the Braves was 290k or so, when the population was about the same as it is now.
So yes, there are many other factors. Last year, for example, the Braves didn’t advertise promotions AT ALL and everyone was put off by them leaving. Heck, their promotions were lousy for a lot longer than just last year.
So, their projections indicate that an average family of 5 will spend $225 on food and souvenirs in addition to tickets? Really? They might get 5,500 fans per game in the first two years. After that, the novelty wears off. A similar attendance decline happened in Memphis after they built a ballpark. Now they’re swimming in debt.
Memphis ballpark woes from 3/15: http://www.commercialappeal.com/news/2009/mar/15/memphis-redbirds-redbirds-hope-to-rally/
leftfield.. I just took the approx attendance (400K)for norfolk.. and their metro population was 1.8.. compared that to 1.2 M for Richmond.. I actually just looked up actual attendance for Norfolk in 2008.. it was 433767.. puts Richmond’s % to total at about 280K/yr.. That is a recent regional comparison.. is Norfolk a “worse” baseball town than Richmond? Are other dynamics at play? maybe.. I still believe that they are calculating spending on a per head basis.. they don’t think the kids themselves would be paying.. but that the parents would pay on their behalf.
Your numbers are way off 270k tickets sold is way too low. Its more like 400-450k for AA. Especially in an area with 1.2 million people. Especially with a new ballpark. And especially when the Nats affiliate gets transferred to Richmond.
I also think the assumption that the $50/fan is off….again, no self-respecting financial firm would include Children (and they DO count in attendance) as a fan who is capable of spending $50.
More on the independent institution - they have their own business to conduct, flubbing the numbers on this high-profile consult would not be a good move for their company.
Finally, jumping to the conclusion that Richmond will step in to support operations…really?? I think that’s a pretty big stretch to make. The ballpark is the big expenditure, the marketing and sales dept supports the operations of the team and facility. The Braves left because they didn’t put the effort into marketing the team, and the Diamond was detracting people from attending. Thus, operation costs > sales.
I think the numbers are being quoted “per fan”.. not per family.. Get ready for the 20 dollar hot dog..lol.
I think that they need to do a “reality” study instead of a “feasibility” study.. Sure if people will spend as much as they would for an all day theme park ticket for a few hours of watching minor league baseball.. it may be “feasible”.. but is that realistic. I see there are some fans out there that want this and would probably pay the price.. but I also remember all the give-away tickets when I attended Braves games and don’t see too many people who will be opening their wallets to the extent that this venture needs to have happen.
As far as the stimulus money goes.. just because other “frivolous” uses have occured.. let’s not rush to earmark this money. Besides.. the initial investment is just that.. the start of the costs. Maintaining this facility will cost a lot and if it isn’t making money like they hope.. the City will probably end up with that expense on an ongoing basis. By increasing the tax rate.. Richmond will be asking for all their citizens to contribute to this plan.. whether they want to or not (i know there are other things we pay for w/no choice) There are approximately 1.2 million people in the greater Richmond area.. Hampton Roads has approx 1.8 million people.. so you would think we would get about the same % of attendance percent to total.. that is about 270K tickets sold… do the numbers really add up in reality?
Ah yes, just because 20, or 200, or 2000, or even 20,000 people find baseball boring, the rest of the howevermany million in the MRA find baseball boring. Lets never have a team again because a percentage of the area doesn’t care for it.
UofR has a football team and virtually nobody goes to those games - they were National Champions!
Soccer? I’ve heard this argument before - the Kickers have drawn a whopping 2540 average attendance over the first 3 games (2 of which had great weather).
I would guess that about 75% of the people who go to minor league games don’t follow baseball particularly closely. Baseball is a nice spectator sport because for those who like it, they appreciate the strategy and finesse involved - and for those who don’t necessarily care for it, its a slow game where the crack of the bat calls their attention to the action, and they can socialize the rest of the time.
Kids LOVE baseball, I would gather that the majority of kids who play sports when they’re young play baseball. How many children do you see at football games?? Very few because you can’t get kids to sit still in their one seat for an entire game. Ballparks now have playgrounds and grassy berms for kids to run around on.
What does that imply? That college football is an adult activity. That severely limits the potential attendance numbers.
As for the ballpark averaging $52 spent for each fan - I would gather this doesn’t include children in attendance. They don’t expect children to have $50 in their wallets. Family of 4 will probably cost $30-32 for tickets, the other 20 is hot dogs, beer, and souvenirs. It’s not that far fetched.
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