Is PaeTec Park on solid ground?

Do they have the money?

            Reporters and lawmakers have been
trying to get the Rochester Rhinos to answer that question since the genesis of
the PaeTec Park proposal in 2000.

            The soccer team has consistently
refused to say how much it has on hand to contribute to the building of its $23
million soccer stadium-in-the-works, causing skeptics to wonder whether the
Rhinos will be able to cough-up their share. Those skeptics include state
Assemblyman David Gantt (D-Rochester).

            “I don’t think the money’s there,”
he says. “Why do they continue to put [building the stadium] off?”

            The Rhinos’ planned contribution to
the stadium has shrunk from $26 million to about $8 million as stadium plans
have been scaled back over the life of the project. According to a press
release from Gov. George Pataki’s office dated April 2000, the stadium was
originally going to cost $44 million. The funding sources were a $15 million state
grant, $26 million from the Rhinos, and $3 million from unnamed “other
sources.” Although the project’s price tag has shrunk to $23 million, the state
is still committed to its $15 million contribution.

            Asked how much he has on hand right
now for the stadium, Frank DuRoss, president and co-owner of the Rhinos, said
“we’ve got enough,” and declined to go into specifics. The Rhinos’ share of
stadium costs will come from private financing, he says, with possibly some
borrowing down the line.

As it turns
out, the
Rhinos aren’t going to need a windfall of private funds to get their stadium
off the ground, thanks to a mostly sympathetic state Legislature and a little
bit of help from a lot of different sources.

            The state has kept its $15 million
pledge to the Rhinos because many lawmakers believe in the project, says Sen.
Joe Robach (R-Greece).

            “It will keep [professional] soccer
here, add construction jobs, and enhance that part of the city of Rochester,”
he says.

            PaeTec Park will be built in the
city’s Brown Square neighborhood, a short distance from Frontier Field.

            The project will create about 200
construction jobs during a 9- to 14-month construction period, DuRoss says.
There will also be 40 to 60 new full-time jobs with the team and the stadium
once the park is up and running. Ancillary job growth in “spin off” businesses
such as restaurants that move into the area as a result of the stadium is
expected, as well.

            The state’s share of stadium funding
is coming from the Empire State Development Corporation, which reviewed
partners’ financial statements, assets, and cash flow before forking over the
cash, DuRoss says. The corporation is a state agency that provides economic
incentives to attract and maintain businesses and investments in New York
State. Representatives of the corporation did not return calls for comment.

            The corporation would never have
agreed to fund the stadium, Robach says, if it didn’t believe the Rhinos could
come up with their share.

            “The state money is the last piece
to close the deal — when private capital is in place and construction is
ready to go,” he says. “They have to be in a position where they’re meeting
their end of the agreement.”

            The $15 million will be passed
through the Rochester Urban Renewal Agency on its way to the Rhinos. The agency
was established in the 1960s to attempt to revitalize “blighted” areas of the
city, according to Allan Richards, spokesman for state Assemblywoman Susan John
(D-Rochester).

            The agency also owns the land the
Rhinos will lease for the stadium. DuRoss says he hopes to present a final
lease agreement to City Council for its approval later this month.

            The lease with the city of Rochester
will likely be in the 45- to 49-year range — the life expectancy of a new
stadium — for a “nominal” annual fee, says Mitch Rowe, assistant to the
deputy mayor.

            Mayor Bill Johnson says that because
PaeTec Park will be a privately owned stadium, the city has not seen the
Rhinos’ financials.

            “We’re not privy to their numbers.”

            Not to worry, the mayor says,
because the $15 million in state money is the extent of taxpayers’ contribution
to the project — although the city is paying out about $3.5 million for
infrastructure and road improvements related to the project.

            “I can’t envision any scenario where
the public would ever have to subsidize PaeTec Park,” Johnson says. “They’re
not going to be left holding the bag.”

            The Rhinos are getting state money
up front and then “they will be responsible from that point on,” Johnson says.

But the $15
million was never in question; it’s the Rhinos’ share that has some
people on edge.

            “From our end, it was never an
issue,” says team spokesperson Eric Trendel. “From other ends, forms of funding
might have been questioned a little bit.”

            Indeed, Robach says the Rhinos “bit
off more than they could chew” in their original plans for a $44 million
stadium. If the team had insisted on sticking with those plans, it would have
had to look to someplace other than the state for more money, he says. “We did
what we could for this project.”

            Take a $23 million stadium, subtract
$15 million in state funding, and that leaves the Rhinos to kick in $8 million,
right? Eventually, maybe. But not right off the bat. In fact, the Rhinos’
initial contribution to PaeTec Park is closer to $1.5 million, according to
Richards and Rowe.

            The $1.5 million, Richards says,
will go to the cost of the stadium itself and toward infrastructure
development, including engineering and architectural work

            The reason the team can get by only
chipping in $1.5 million initially is because, Richards says, it is deferring
the construction of 20 planned stadium luxury boxes. The hope, Richards says,
is that well-oiled investors will see how successful PaeTec Park is once it
opens, and want to be part of it.

            And if that doesn’t happen? “That, I
don’t know,” Richards says.

            Delaying the luxury boxes is not
about money, counters DuRoss, it’s about getting the stadium up and running in
time for next season.

            “We still intend to build 20 luxury
suites,” he says. “It’s a time issue more than anything else.”

            The Rhinos are also saving money by
leasing the 26,000-square-foot Empire Precision Plastics building at 460 Oak
Street for the team’s administration building and possibly, locker rooms. The
building will house team and stadium offices, a merchandise store, ticket
windows, and some storage space. The building’s current tenant has decided to
relocate, DuRoss says.

            The Rhinos, Rowe says, will enter
into a 15-year lease with an option to buy with the building’s owner, Maguire
Properties. The team will be able to exercise that option at any point during
the life of the lease. The Irondequoit-based Maguire Properties is also paying
approximately $1.8 million, Rowe says, to rehabilitate the building to meet the
Rhinos’ needs — another cost savings for the team.

A stadium
groundbreaking could be just weeks away, DuRoss says.

            “We’ve been pigeonholed in dates in
the past. We don’t want to be set in stone on a date,” he says. “The goal is to
break ground relatively quickly.”

            The timeframe is tight, DuRoss says,
but the team does plan to play home games at PaeTec Park next season. Since the
season starts in early May, DuRoss says the team will play on the road and
possibly at Frontier until the new stadium is ready.

            Mayor Johnson says he believes in
the project and that all the headaches — project delays, funding questions
and/or struggles — will be worth it.

            “I believe there is a market out
there,” he says, adding that the stadium will generate positive cash flow for
the community. “It will have a tremendously beneficial effect.”

            But some, including Assemblyman
Gantt, say that while PaeTec Park may be a dream worth believing in, the way
the deal is being put together is scary and unconvincing of the long-term
viability of the stadium.

            “I still say, ‘Where’s the money?'”
he says. “You’re leasing this, you’re leasing that… I think it’s very shaky.”

            Back when the price tag was $44
million, Gantt says, the state’s $15 million commitment represented a small
fraction of the project’s cost. The state’s commitment hasn’t changed, Gantt
says, but it is now picking up more than 60 percent of the tab.

            “There’s something wrong with this
picture.”

This article appears in Sep 10-16, 2003.