Friday, August 15, 2008

Shatel: Sarpy County All But Committed to Royals

Tom Shatel of the Omaha World-Herald pretty much confirmed something that I doubted would happen: Sarpy County wants to spend millions of dollars to build a second baseball stadium.

Oh sure, they're going through the formality of putting together a study to determine how to pay for it, but Shatel reports the decision probably has already been made. In an meeting with several Sarpy County officials, county attorney Lee Polikov told Shatel at one point that "This is just me talking, but I think we should do it."

Why are they doing this? Good question. They claim it's to save minor league baseball for the Omaha area. Perhaps. It's not because they think it's going to turn any sort of profit; they're hoping to merely break even on the deal. (I still think "breaking even" is an extremely optimistic goal for this...but I digress...)

How much is this going to cost? Sarpy County officials don't know. The Royals have told the county that it probably will cost $30 million, but they aren't sure if this figure includes land costs. When you consider that Lincoln's Haymarket Park cost $30 million 7 years ago, I'd assume that this number excludes the land costs. The Royals indicate that they'll chip in 25% of the cost (in other words, about $7 million). So Sarpy County needs to find a way to pay $22 to perhaps as much as $30 million.

Where does that $22 million come from? Good question. Shatel indicated that county officials think stadium revenues will pay for much of it. Oh really? Let's look at Omaha's financing plans for the downtown stadium, which are planned to raise $38 million: premium seating (boxes, club seats) $16.38 million; naming rights $8.9 million; seat tax $4.6 million; parking revenue $3.4 million; Royals/Creighton leases $7.1 million; concessions $2 million.

First of all, let's scratch off the Royals/Creighton revenues right off the bat; that's not happening. So, $31 million still needs to be raised. But will the Royals draw $16 million for club seating in Sarpy County? Hardly. Parking revenue? Isn't that one of the Royals concerns downtown? Make that $0.00. Naming rights? The rights for a facility where ESPN broadcasts from for two weeks is going to be worth much more than the rights for the Royals stadium.

I'm looking at the math here...and I don't see how this pays for itself. Even if you consider the multiplier effect of development around the ballpark, it looks like it's a money loser. Enter property taxes to make up the difference. That's the price for building a stadium in Sarpy County.

Nevertheless, it looks like Sarpy County wants to do it.

Since I don't live in Sarpy County, why do I care? Well, for starters, I still believe that building two stadiums is a tremendous waste of resources. The Omaha metro area likely only sees the same amount of benefit, but now the cost is significantly higher. I also think the offer from Sarpy County is influencing the Royals decision to look for other options. Let's be honest here...what incentive did the Royals have to negotiate with MECA when they know that Sarpy County is planning to give them what they want?

Also, it's time to forget Chalco. Sarpy County officials are looking towards the highway 370 interchange with I-80. That's almost Richfield... maybe Gretna.

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