A $4 million financing package that draws money from several sources, including $1.8 million in debt, was selected Monday night by the Joplin City Council for a baseball proposal at Joe Becker Stadium.
The council action came after it looked at financing options for expanding and renovating Joplin’s 100-year-old baseball stadium to lease to a franchise of the American Association of Independent Professional Baseball. An investment group primarily composed of ownership and management from the former El Paso Diablos wants to base a team in Joplin.
The investors, WLD Suarez Baseball LLC, have proposed a $9.3 million development including the city’s $4 million project to add seats, new lighting and new restrooms, and make other renovations at the stadium.
City Manager Mark Rohr presented five financing options Monday night. The package that was tabbed calls for the city to:
• Sell the land it owns adjacent to the stadium to the Suarez group for $161,000.
• Use $500,000 in money from a cellphone settlement the city received.
• Take $500,000 from a surplus in the Convention and Visitors Bureau fund.
• Use $1 million from a balance in the fund the city has to pay its share of workers’ compensation cases.
• Borrow $1.8 million, to be repaid by leasing the stadium to the baseball group. Rohr said the $150,000 in annual lease payments would make the payments on the debt, which is estimated to be about $140,000 annually.
Other possible sources would have involved proposing an increase in the city’s hotel and motel sales tax, or paying more from the city’s general fund or the CVB fund balance, which has about $2 million in unused motel tax money.
Rohr said the city can afford to use money from its workers’ compensation fund because it has put more money in the fund each year than it has had to pay out, creating an excess. There is around $2 million in the fund, according to city documents. The city puts about $700,000 in the fund each year, and claims have never been more than $400,000 a year, Rohr told the council.
Additionally, the city has workers’ compensation stop-loss insurance that would pay if there are individual claims of more than $100,000 each.
Rohr said the city could borrow the $1.8 million in a general-purpose type of debt that would be issued specifically for stadium renovation. He said the city has little debt other than the loans obtained for work on the wastewater treatment plants. Voters in 2009 approved the issuance of bonds for up to $35 million to pay for expansions and the installation of new equipment in the city’s two plants. The city has not yet spent all of that.
But, the financing plan was not the first concern expressed.
Councilman Benjamin Rosenberg said, “My major concern is that the Suarez group needs to demonstrate to us that they have the funds to do their part.” He asked that the Suarez partners provide a letter of credit or some other proof that they have the money to cover their share of the investment.
Rohr said city officials are working on that. “That would be pinpointed by the performance agreement” that is to be developed between the city and the Suarez group, he said.
City Attorney Brian Head said he expects to have a detailed lease agreement ready at next Tuesday’s regular meeting for the council to consider. He then will work on a performance agreement that will detail the responsibilities of both the city and the Suarez group, and that should be ready in February, he said. That will include the financing obligations.
Head told the council that the Suarez group wants to get started on its part of the work as soon as possible, no later than next month. That will first involve completing land purchases in the area around the stadium to build parking lots.
“We ought to already see lots of activity going on” by the time the lease agreement would take effect in August, Head said. If not, the lease agreement could be canceled and the project dropped before the city spends money on the stadium, he said.
He said the Suarez group plans to buy the land for the parking lots with cash and does not intend to incur debt for that part of the project. For that reason, the council should know quickly if group is financially able to swing the deal, Head told the council.
Rosenberg said the city’s alternatives are to go ahead with this proposal or to tear down the stadium and make it a park, “and no one wants that.”
After Head’s reassurances that there would be checkpoints, council members resumed their discussion of the financing options.
Rosenberg, Mike Seibert and Mike Woolston agreed that they did not wish to pursue a suggested increase in the motel tax to finance the project. That would require a public vote.
Bill Scearce said he is not concerned about what the group will do in the short term but whether Suarez can sustain professional baseball for 20 years, which is the term of the agreement. He asked if the group would provide its business plan to the council’s newly appointed finance committee for review.
Seibert said the council should be able to determine if the Suarez group can fulfill its agreement in the short term to build an entry plaza and parking lots at the stadium, but that no one would be able to guarantee that a baseball team could last 20 years.
Councilman Jack Golden suggested that the land the baseball group will buy be pledged to the city if the deal fails. The city attorney said that is possible so the city would have something to sell to repay its investment.
Rohr showed the council some figures on the potential economic development impact of the baseball development. He projects that the city would realize the return of the $4 million investment within 4.68 years based on those figures.
The council voted 8-1, with Morris Glaze abstaining, to approve the financing plan. Glaze abstains from votes because the company for which he works, Standard Transportation, has property that is to be bought by Suarez for the parking lot project.
FINAL ACTION on the baseball proposal may come at the council’s Feb. 18 meeting.