Where do you stand on the issue of using county tax dollars to subsidize the cost of building a privately-owned ball park by a for-profit California corporation?
It’s helpful to hear from both sides of this issue – from those who give reasons to subsidize the cost of building the ball park with tax dollars– as well as from those who cite reasons for not risking tax dollars. [After all, everyone knows what happened to federal tax dollars invested in the “green industries” such as Solyndra – they went “bust!”]
THE FACTS ABOUT “BIG LEAGUE DREAMS”:
The proposed project is called “Big League Dreams” (BLD,) and is being promoted by a public agency called the Clay County Economic Development Authority (EDA), whose members are appointed by Florida’s Governor and serve 4-year terms.
“Big League Dreams” is private, for-profit corporation which builds scaled-down replicas of famous ball parks such as Boston’s Fenway Park, New York’s Yankee Stadium, and Chicago’s Wrigley Field. They can also include in their design indoor soccer fields and other multi-purpose facilities for private and business parties, etc.
BLD has facilities in 7 California cities, 2 in Texas, and one each in Arizona and Nevada. Tony Boselli has been hired to promote BLD in Clay County – a common practice by BLD in other communities.
They do not provide the risk capital to build these facilities; instead, they use “public-private partnerships” in which local governments put up the risk capital, based on a negotiated percentage split of operating revenues collected by BLD.
PROPOSED BENEFITS TO CLAY COUNTY:
District 1 County Commissioner Wendell Davis said the benefit is “jobs, jobs, jobs.” And this is consistent with the purpose of the EDA, which is “promoting sound economic development of Clay County.”
ESTIMATED COSTS TO CLAY COUNTY TAXPAYERS:
The Clay County Board of County Commissioners will probably be voting in August of this year on whether to fund this project with tax dollars. They asked their financial adviser, the Clay County Auditor who is a CPA to analyze the costs and benefits. His job is to provide objective, unbiased financial advice to the Board, and he has written two financial analyses, one in August 2012, and the second in July, 2013.
Here are 11 of the most significant findings of the County’s chief financial analyst:
1. “BLD told the EDA last year that the larger 6 field facility would get us (on average) $200,000 per year revenue sharing. I have the schedule they presented to CCDA and can prove this. Now, IGS says $300,000 per year revenue sharing should come to CCDA/the County and that the county should negotiate a guaranteed $100,000 a year from BLD.” – 2013 analysis
2. “Increased Ad Valorem taxes from indirect development. This is a pet peeve of mine: The BCC has already gotten St Vincent’s as an anchor along that corridor. The hope is that other high tech, high- paying, health care associated business would develop along that corridor. As that corridor develops, county government will get those increased property taxes whether a BLD park is there or not. One could argue that development associated with the Ball Park would crowd-out the high-tech, high paying, and health care-related development and replace it with less valuable hotels, restaurants and retail establishments yielding lower paying jobs for Clay County citizens.” – 2013 analysis
3. “BLD is asking the citizens of this county to spend @$20 million+ to build them a turn-key, for profit business, but they don’t want to share their confidential and proprietary audited corporate financial data with us. As an accountant and auditor, that is a huge red flag to me.” – 2013 analysis
4. On the last point, that goes for the partnership who is donating the BLD site: Has anybody examined their audited financials? Does anybody know the partnership’s net worth? Are they sufficiently capitalized to accomplish the basic site planning and preparation to make good all the promised improvements? Do we know who the partners are? (Partners are liable for the debts of a partnership.) If we have no evidence they can accomplish what needs to be accomplished with the associated development site, then all the promised development is just a dream. By the same token, if the partnership is just flipping the land for a profit to other developers, then nobody knows what – or how much – development will eventually take place. I don’t think IGS or Mr. Boselli’s group answered any of these questions.” – 2013 analysis
5. “According to the Institute for Economic Competitiveness at the University of Central Florida in a July 28, 2010 article in the Sarasota Herald Tribune: In the previous 13 years, Big League Dreams, USA had paid-out a total of $11 million to its government partners on profits made using infrastructure that had cost those government partners $219 million to construct. In his December 8, 2011 letter to the CCDA, Mr. Rick Oderkirk represents that Big League Dreams has “to date paid out more than $16 million to its municipal partners”, $5 million more than the Institute for Economic Competitiveness had represented just one year earlier. Accepting Mr. Oderkirk’s numbers, local government partners have only recovered about 7% of their collective capital investment to date, as a class nationwide.” – 2012 analysis
6. “Big League Dreams, USA claims that the real return to local government is in economic growth and development. Mr. Oderkirk claims that he can provide the county with economic studies which show that such a facility will yield economic growth and development impacts ranging from $17 million to $30 million. If those figures represent growth in taxable sales, the county will see an increase of $85,000 to $150,000 in general revenue sales tax (½ cent local option sales tax); and, an increase of $170,000 to $300,000 in capital projects sales tax revenue (1 cent infrastructure sales surtax). If those figures represent additions to the non-exempt (business) taxable property base, then the county will see an increase of $133,467 to $235,530 in non-exempt ad valorem revenue at the current millage rate of 7.8510. (This assumes that there will be no further statutory or constitutional reductions or exemptions to our taxable property base.) Realistically, the growth and development-associated revenue to the county will be a combination of increases in sales tax and property taxes (indirect revenues) not exceeding $350,000. Based on Big League Dreams’ assertions, and assuming the entire growth is attributable to taxable sales, the county will see no more than $150,000 growth in general revenue owing to this facility and the associated growth. The total direct and indirect return to the county government in general fund revenue is likely no more than $350,000 per year. ($200,000 directly from Big League Dreams revenue sharing and a maximum of $150,000 per year of general fund sales tax revenue.)” – 2012 analysis
7. “Those economic benefits would have to be weighed against the consequent increase in demand for services, and consequent costs, owing to such a facility……. It is unlikely that total direct and indirect general revenue to the county will be able to keep pace with the cost of the growth in demand for services.” – 2012 analysis
8. “The revenue discussion in the previous paragraph demonstrates how difficult it will be to raise enough revenue to pay for the increased cost of these services. The payback period for this project would be between 75 and 125 years under the most optimistic projections . Factoring the likely costs associated with increased demand for services, and the project is a net loss to the taxpayers.” – 2012 analysis
9. “What are we giving-up if we decide to build this facility instead?” For the purposes of this discussion, I have dealt only with alternative uses for the $13 million series 2009 bond project savings and the $930,000 TDC reserves. The County Manager had intended to ask the Board to expend approximately half of existing TDC reserves (about $450,000) to repair and improve sewage systems at the county fairgrounds. This project would be delayed or cancelled if the reserves were used in some other fashion. The series 2009 bond project savings of approximately $13 million could be used for any of the following, or some combination of the following:
• Retirement of the series 2009 bonds early.
• Paving of 17.33 miles of county maintained dirt roads at $750,000 per mile.
• Construction of 13 $1 million drainage projects.
• Construction of 4 fire stations at approximately $3 million apiece.
• Replacing the county’s public safety radio system backbone at a minimum cost of $13 million.
• Purchase land and develop 4 parks at approximately $3 million apiece.
• Construction of 1 Library at approximately $9 million.
• Fairgrounds sewage system improvements.
• Purchase of 26 fully-equipped fire trucks at approximately $500,000 apiece.
• Purchase of 52 fully-equipped ambulances at approximately $250,000 apiece.
• Purchase of 43 road graders, or similar heavy equipment, at approximately $300,000 apiece.
• Replacement of 130 fully-equipped Sheriff’s patrol vehicles (Crown Victoria equivalent) at approximately $100,000 apiece.
• Down payment on the construction of a county prison farm.
CONCLUSIONS (2012 analysis)
10. “This would not be a profitable venture for Big League Dreams USA, LLC if they had to incur the capital investment in the facilities. Big League Dreams would not otherwise recruit local government partners if such were the case. The minimal payback period for the county for this project, in my opinion, is 75 years (if the capital investment is only $15 million) and more likely 125 years (based on a more likely construction cost of $25 million). In any event, the county would not recover even one quarter of its investment over the course of a prospective Big League Dreams contract.” “Also, total county costs due to increased demand for services and other infrastructure would likely exceed total receipts to county government over the course of the proposed 30-year contract with Big League Dreams. This is likely the case even under Big League Dreams’ most optimistic prospectus. Moreover, at the end of the proposed 30-year agreement, it is reasonable to assume that the constructed facility will require renovations, additions, or improvements. The costs for these (renovations, additions or improvements) are not even addressed in the analysis above, but would almost certainly extend the recoupment of the taxpayer’s original investment.” – 2012 analysis
11. “In my report of last August, I told the BCC that the reported costs of most other comparable BLD parks averaged $30 million and that this one would therefore probably cost us between $25 – 30 million. I haven’t seen a thing that would make me change my mind.” (The BLD claims it could be built for $19 million.) – 2013 analysis
OTHER COMMUNITIES AND BLD:
Action News Ryan Smith discovered that Oxnard, California terminated its deal with Big League Dreams because leaders there also had concerns about costly construction overruns. “The costs were not properly represented,” said Tim Flynn, mayor of Oxnard, California. Mayor Tim Flynn has some advice for Clay County leaders. “They need to determine as a community, collectively if they can afford it and not predicate it on rosy projections.”
“The cost to Gilbert, AZ taxpayers is $42 million, plus $7 million in interest so far, with only $55,000 returned as part of the “split” (6 percent of the gross revenues). From a financial perspective, there will not be a return on investment.” – AZCentral.com, July 6, 2012
“I don’t see a situation where this project will ever flow to the black,” Gilbert Town Manager Patrick Banger said. Big League Dreams was built for more than $40 million. Paid for with bonds, the final price tag is $53 million, because of interest. The ABC15 Investigators have reviewed contracts, financial statements and tax records related to the Big League Dreams complex. Those figures show that Gilbert will receive roughly $200,000 to $300,000 a year in revenue.
Based just on the park’s receipts, it will take the town more than 250 years to break even.” – abc15.com, September 30, 2011
One Clay County citizen who thinks this would be a terrible waste of taxpayer dollars has suggested that an alternative to subsidizing a private, profit-making California corporation would be to consider a long-range plan to upgrade the existing 31 county parks and facilities scattered throughout all the districts in Clay County. A feasibility study could determine which existing community parks in the Oakleaf, Orange Park, Fleming Island, Green Cove Springs, Middleburg, and Keystone Heights would merit upgrading to include building smaller-scale facilities at a significant savings to the taxpayers.
Contact your Clay County Commissioners to express your opinion regarding this:
(PS Commissioner Robinson is opposed to the BLD project)
District 1: Wendell Davis
GCS Phone: 284-6384
OP Phone: 269-6384
Cell Phone: 234-4630
District 2: Doug Conkey
GCS Phone: 529-4701
OP Phone: 278-4701
Cell Phone: 657-7364
District 3: Diane Hutchings
GCS Phone: 284-6393
OP Phone: 269-6393
Cell Phone: none listed
District 4: Chereese Stewart
GCS Phone: 284-6384
OP Phone: 269-6384
Cell Phone: 482-7738
District 5: Ronnie Robinson
GCS Phone: 284-6385
OP Phone: 269-6385
Cell Phone: none listed