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BLD: Shaping up as break even undertaking in terms of direct municipal impacts
The Manteca Big Leagues Dreams sports complex is on target to top the 2009 paid attendance record of 430,700. - photo by Bulletin file photo
Big League Dreams in terms of direct municipal impacts is a break-even proposition

City Manager Steve Pinkerton’s take on the sports complex put in place before his arrival in Manteca just over two years ago is based on financials and what a typical municipal sports complex would cost and generate in revenue as well as expenses.

Pinkerton’s remarks came on the heels of the release of the BLD’s second quarter report.

April May, and June retail as well as concessions revenue reached $573,675 – up 17.8% from last quarter. The city received two rent checks for the quarter totaling $101,788.03. Paid attendance for the second quarter reached 116,911, up 9.6% from the last quarter.

Breaking even may not seem like a good thing in the business world but cities don’t run businesses. They provide municipal services.

Pinkerton noted a nice municipal park with six fields minus the BLD gingerbread that completes the baseball experience for players and fans would cost around $20 million. It would also have to be maintained and operated by city employees which would impact the general fund.

The BLD complex did cost more to build as it came in at under $29 million.

Based on the second quarter money the city received, over the course of the 35-year contract BLD would pay the city $14 million. In addition, Manteca will be off the hook over 35 years for $17 million in operating and maintenance cost normally associated with a traditional six-field municipal softball complex.

That would - between avoided expenses and money returned - essentially make BLD a bit better than break even without considering municipal financial impacts from out-of-town visitors and other fans that are in excess of 430,000 a year.

“Show me another municipal softball complex in California that is on a break even basis,” Pinkerton said, adding less elaborate and effective complexes typically cost cities significantly more than the initial money to build them.

A purely municipal complex instead of one owned by the city and then leased to BLD to manage and operate would still require $17 million to be spent on maintenance and operation

Prior to the BLD partnership, adult softball leagues run by the city basically covered the cost of officials, some staff time, and part-timers that were hired to assist with the programs. Actual park maintenance and the balance of staff costs were underwritten by the general fund. The city also had a fraction of the teams in regular league play and only a handful of tournaments during the year.

By contrast, BLD is nearly at capacity with league play and has at least one tournament involving out-of-town competitors each weekend. Kevin Flora, BLD’s corporate level vice president of park operations, noted the indoor soccer arena is at full capacity with 124 teams.

The $17 million savings over 35 years is basically eliminating the need for the general fund to support maintenance and operations of the sports complex. Instead, it is being paid by those accessing it through team fees, spending at Stadium Club restaurants, and gate admission.

Pinkerton noted government workers are “ill equipped” to aggressively market a sports complex for local and regional play to the degree a private sector firm can that is worried about generating money to make ends meet, to keep the complex in competitive shape to attract business, and to turn a profit.
The projected $14 million in city revenue from BLD rent payments over the course of 35 years is now flowing back into the park fund to underwrite other recreation projects.

Critics point out that the $29 million in redevelopment agency fund was borrowed as the agency has to create debt by binding in order to operate under California law.

Pinkerton said it is wrong, though, to characterize BLD as creating RDA debt since the money to do the project was already generated by bonds sold by the RDA

The RDA bonds are paid off using property tax increment. Interest earned from money waiting for projects to move forward in RDA accounts almost covers the interest cost of its long-term loans that are tax free debt financial instruments.

Had the city built a sports complex similar to Tracy’s it would have come in for around $20 million or about $9 million less. The funding would have been from borrowing against future park fees.

“If we had done that all of the park fees collected would have gone to pay off the sports complex debt,” Pinkerton pointed out.

It would have reflected a big opportunity costs in not being able to do other recreation projects for at least 15 years.

And if for some reason BLD goes south, the general fund that provides basic services such as police and fire protection isn’t on the hook.