Sunday, February 15, 2009

Chalco Boondoggle Downsizing

In a former assignment, a former supervisor had a plan to deal with projects that turned out to require more resources than were available: simply do as much as you can, and redefine the scope of the project downward. Project requirements weren't as important as coming in on time and on budget. Anything that didn't get done might get done later as a separate project later on. The results of the project usually ended being less than what was originally envisioned at best, and more often than not, wasn't even usable without a lot of followup work. But it was on-time and on-budget.

Today, Tom Shatel of the Omaha World-Herald reports on the progress of Sarpy County's negotiations with the Omaha Royals on a Chalco ballpark proposal. As predicted, Sarpy County simply can't build a $30-$40 million ball park. So now they're setting their sights much lower. Much lower. $20 million, and a stadium with as few as 5,000 (or perhaps only 4,500) seats.

Can Sarpy pull that off? Well, the odds are better than before, though we still haven't heard how Sarpy County plans to pull this off, except for the Royals chipping in $12 million over 25 years. (That translates to about $6.5 million, amortized over 25 years at 5.5% interest) So that's about 1/3rd of the cost. That still leaves about $15 million for the ballpark itself.

Then there are site preparation and land costs. How much is that? Hard to say, but DLR tells Shatel that Hawks Field at Haymarket Park in Lincoln only cost $13 million of the $32 million project. $19 million was for Bowlin Stadium for softball and the infrastructure. Add in that, and you are looking at cost to Sarpy County of over $20 million...perhaps $25 or $30 million.

Still no word on how to make it happen. Doesn't mean it can't be done...but they keep avoiding the discussion. In fact, it now sounds like an agreement could be reached without having a way to pay for it.

But what good are 5000 seats for the Royals? I argued that a 6,500 seat stadium was too small last month; so how does a 20% cut from there work? (Don't forget that last season, the Royals averaged 5400 fans a night, and that includes 22,287 on the 4th of July!) Shatel alludes to what this means for fans: fewer seats makes the Royals a "tough ticket", which is a positive way to say "expensive tickets". The Royals have done great work in recent years with promotions to get fans to Rosenblatt, so accepting smaller crowds will probably mean less expense on promotions and higher margins. But it does raise the question if it ends up costing $15 a person to attend a Royals game, whether fans will choose to head downtown for $8 independent league tickets.

Bottom line: the Sarpy ballpark is looking more possible than it did before, but if anything, it's looking like more and more of a bad idea.

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