For professional sports teams, making a bad deal can lead to a disappointing
season or two (witness the Bills’ decision to trade a first-round draft pick
next year for the abysmal Drew Bledsoe). But when a municipality makes a bad
deal on a sports stadium, the disappointing results can play out for years.
ย ย ย ย ย ย ย ย ย ย ย That’s the situation in Monroe
County, where outstanding debt on Frontier Field poses a long-term expense.
ย ย ย ย ย ย ย ย ย ย ย The facility, which opened in 1996,
cost roughly $41.5 million to build. The state pitched in a $16 million grant
toward construction costs, but the county covered much of the rest of the
expense with county-backed bonds. The county still owes $24 million on the
stadium, and servicing that debt costs county taxpayers about $1.7 million a
year.
ย ย ย ย ย ย ย ย ย ย ย In early December, County Executive
Jack Doyle decided to redirect roughly $700,000 in annual income generated by
an increase in the hotel occupancy tax toward debt payments on Frontier Field
(the money was initially earmarked for PaeTec Park). But even with that money,
“It still leaves us with a million dollars that the county has to pick up every
year,” says Tom Frey, a member of the Greater Rochester Sports Authority, the
body set up to oversee operations at Frontier Field and, initially, the
construction of PaeTec Park.
ย ย ย ย ย ย ย ย ย ย ย The problem isn’t that the Rochester
Rhinos plan on leaving Frontier when PaeTec Park is completed in 2004, though
that move doesn’t help much, either. The Rhinos presence “never contributed an
awful lot toward the Sports Authority itself or the operation of Frontier
Field,” Frey says.
ย ย ย ย ย ย ย ย ย ย ย “The ones that probably lose when
[the Rhinos] move are the Red Wings,” says Frontier stadium director Jim
LeBeau.
ย ย ย ย ย ย ย ย ย ย ย That’s because the Red Wings keep
most of the revenue from non-baseball events at Frontier. (The Wings fork over
12 percent of concession proceeds to the county, which in turn gives the Rhinos
5 percent, according to the terms of the Rhinos’ most recent lease.
Negotiations on a new lease agreement with the Rhinos — most likely a
one-year deal with a one-year option — are scheduled for January, but the
concession revenue split is unlikely to change.)
ย ย ย ย ย ย ย ย ย ย ย Without revenue from concessions
sales at Rhinos games, the Wings stand to lose between $150,000 to $250,000,
according to Red Wings President Gary Larder.
ย ย ย ย ย ย ย ย ย ย ย The Rhinos “don’t provide any
revenue” to Frontier Field, LeBeau says, because even the few thousand dollars
the stadium kept from concessions sold at Rhinos games last season was used to
defray costs associated with the Rhinos’ presence at Frontier, such as
reconfiguring the field for soccer and more intensive maintenance of the grass.
“The real
problem,”
says Frey, “is that the county just signed awful agreements when they first
started [Frontier Field].” In particular, Frey says attendance estimates for
Red Wings games were over-inflated.
ย ย ย ย ย ย ย ย ย ย ย Under the terms of the Wings’
20-year lease, the team gives the stadium a higher percentage of the income it
receives from selling advertising space and concessions if its season-long
attendance tops 300,000. “That might have happened the very first year,” Frey
says, “but it’s never happened since.”
ย ย ย ย ย ย ย ย ย ย ย Naomi Silver, who chairs the board
of Rochester Community Baseball, defended the Wings’ lease agreement with the
stadium, saying it’s “the most expensive lease for a baseball team that we are
aware of in professional sports.”
ย ย ย ย ย ย ย ย ย ย ย “We signed what we thought would be
a fair lease,” Silver says. “In years when we weren’t drawing huge numbers, the
county would get less of a cut. And the fact of the matter is that, like in all
stadium situations that I’m aware of, the municipality has to pay the yeoman’s
portion of the cost of the stadium. That’s how stadiums are built. If it was up
to the private sports franchise to pay for the facility, there would be no new
facilities. You can go to any city in our league and find that to be the case.”
ย ย ย ย ย ย ย ย ย ย ย Silver says “most teams get all
their suite revenue and get all the parking revenue” from their games, but in
this case, those funds go directly to the stadium. Larder adds that the stadium
— and, thus, the county — gets $125,000 in advertising revenue from the
team regardless of attendance, in addition to a 50-cent facility-use fee on Red
Wings tickets, which amounted to about $112,000 last season.
ย ย ย ย ย ย ย ย ย ย ย Silver hopes, even expects, that the
Wings’ new affiliation with the Minnesota Twins major league franchise will
boost attendance — and, as a result, revenue for both the team and the county
— next season. “I think people are as excited about this new affiliation as
I’ve ever seen fans get excited about anything — second only to the opening
of a new stadium,” she says.
ย ย ย ย ย ย ย ย ย ย ย On the down side, Silver says the
presence of PaeTec Park will tighten an already-squeezed market for corporate
sponsorship in the region, as teams vie for revenue from stadium advertising
and suite sales. And in these tough economic times, fans will be all the more
choosy when it comes to buying sports tickets.
ย ย ย ย ย ย ย ย ย ย ย In short, a good season for the Red
Wings would alleviate some of the county’s debt. If season attendance tops the
300,000 threshold, the county gets more money, and if more fans come from out
of town and stay overnight in a hotel after the game, the county’s occupancy
tax revenue gets a boost.
ย ย ย ย ย ย ย ย ย ย ย But that all depends on how well the
players swing the bat.
Essentially,
“the county is stuck,” Frey says. The Wings’ lease won’t be up for negotiation
again for another 14 seasons.
ย ย ย ย ย ย ย ย ย ย ย “I don’t think there is a solution,”
Frey says.
ย ย ย ย ย ย ย ย ย ย ย Doyle has made the case that the
state should help the county pay off the debt on Frontier Field, and has
brought up the state’s forgiveness of a loan it authorized to help build
Buffalo’s Dunn Tire Park baseball stadium as precedent.
ย ย ย ย ย ย ย ย ย ย ย The two counties’ situations,
however, are not analogous. In Erie County’s case, the state forgave a $22
million loan it made to help construct Buffalo’s baseball stadium. Monroe
County’s debt is to the bond holders, not the state. And, according to Monroe
County’s chief financial officer, Gerald Mecca, the state cannot legally take
on the county’s obligation to those bond holders.
ย ย ย ย ย ย ย ย ย ย ย The state could, in theory, provide
the county with a separate funding stream the county could then use to repay
its debt on Frontier Field, but that would take the agreement of the governor’s
office and both houses of the state legislature, a situation that’s “not a very
common occurrence,” Mecca says — an understatement, to say the least.
ย ย ย ย ย ย ย ย ย ย ย Plus, as Mecca, Frey, and some local
state representatives note, the state’s facing a fiscal crisis that could reach
$10 billion next year.
ย ย ย ย ย ย ย ย ย ย ย Democratic State Assemblyman David
Gantt and Republican State Senator Michael Nozzolio have both pushed for state
help with the county’s debt on Frontier Field. Incoming, newly Republican State
Senator Joe Robach says he’s also willing to look into that prospect.
ย ย ย ย ย ย ย ย ย ย ย But as local Assembly Dem Joe
Morelle points out, the state may be less willing to take on more of Frontier
Field’s costs given its previous grant to the stadium. “What Doyle is basically
saying is that the state paid for half of the construction of Frontier Field,
and now we wants them to finance the rest of it.”
ย ย ย ย ย ย ย ย ย ย ย “That is asking an awful lot of the
State of New York,” he continues. “Given the state’s financial situation, and
given the fact we paid for half the construction to start with, it seems
unlikely.”
This article appears in Jan 1-7, 2003.
