by Sam Hieb
Winston-Salem City Council unanimously approves a new financing deal for BB&T Ballpark, home of the Class-A Dash:
Under the deal’s provisions, the White Sox will pay $8 million to buy into the team. The new money will be used to pay off outstanding team loans as well as paying down part of a short-term $15 million construction loan that the team secured in 2009.
The team will use $2 million to reduce that debt to $13 million. The city will then pay off the short-term loan with new long-term financing. The team will pay the city $1.8 million annually, with the amount gradually increasing over 25 years to pay off that $13 million loan, plus $18 million in loans provided earlier.
The deal retains the city ownership of the ballpark, since the team’s $15 million construction loan had used the city-owned stadium as collateral.
While it’s a good thing that the stadium will no longer be collateralized, it’s uncertain how much the city will profit form the new deal. The earlier spin was the city would make $4 million(!) over the course of the deal, but now city officials are backing off that projection:
Although some city leaders had said recently that the city could actually net $4 million over the 25-year term of the new deal, Lisa Saunders, the city’s chief financial officer, sought to downplay that chance in a conversation last week.
“The $4 million is part of our projection, but the debt is a floating-rate debt,” Saunders said. “There are some projections about what the rate might be, but we don’t know what it might be for the next 25 years. The city’s intent was to break even and not make money one way or the other.”
…City Manager Lee Garrity said in an email that he sent to council members on Friday that under the existing agreement with the Dash, the city was projected to net about $1 million over 25 years – although Garrity, like Saunders, couched the figure in uncertainty by saying that too depended on actual interest rates.
“The city is not trying to make money off the team,” Garrity said.
Take into consideration the maintenance of the stadium over the course of 25 years, it seems to me that that city if anything will be losing money.