Biz of Baseball recently reported on the state of stadium financing. Topics examined included the rising costs of financing due to drastic changes in the auction–rate bond market and the advantages in acquiring financing via “mixed use” developments. Subsequently there have been notable developments on both fronts.
CARDINALS’ BALLBARK VILLAGE AT A STANDSTILL?
Plans for the development of a ballpark village adjacent to the new Busch Stadium in St. Louis suffered a major setback on March 26 when Centene Corporation announced that their agreement with Ballpark Village developers to construct their new $250 million headquarters had collapsed. The St. Louis Post-Dispatch reported that, “ Centene had planned to acquire two blocks within the six-block Ballpark Village at the site of the old Busch Stadium.”
The now failed negotiations between the city, the developers and Centene have delayed all aspects of the Ballpark Village development. City officials and the developers are blaming one another for the delays and failure to finalize the agreement with Centene. The Centene announcement has contributed to increasing doubt about the future of the entire project.
From the same St. Louis Post- Dispatch report. “ Publicly, the co-developers — the Cardinals and Baltimore-based Cordish Co. — put on a united front with the city. Behind the scenes, however, major conflicts flared and were never resolved. The two sides could not hammer out a development agreement spelling out the timeline of the project, its precise components and how it would fit in with Ballpark Village. “
From a separate St. Louis Post-Dispatch report, “Ballpark Village, billed as the city's reward for public support for the Cardinals' new ballpark, has already been beset by delays. Now, at least this much seems clear: St. Louis will endure a third season with a crater of dust next to its ballpark. How much longer will it be there? Nobody seems to know.”
From the St. Louis Business Journal, “ Since Cordish was tapped by the St. Louis Cardinals in 2005 to be the 50-50 development partner on Ballpark Village, a number of targets have been pushed back. In May 2007, Bill DeWitt III, the Cardinals' senior vice president for business development and newly appointed president, said he expected a general contractor to be named in 30 days. Almost a year later, a general contractor hasn't been selected yet. “
In another St. Louis Post-Dispatch report. “ The firm's exit, plus a souring economy, has prompted the team, Cordish and the city to seek a new development agreement. In other words: The clock on Ballpark Village has been reset. “
In the same report team and city officials express concerns that they will be embarrassed nationally when St. Louis plays host to the 09 All Star Game with a huge, gaping hole ( the site of Ballpark Village ) adjacent to Busch Stadium. See the photo.
DeWitt allowed that the team could be forced to build something — even if it's just temporary — so fans are not greeted by a giant dust patch when the Major League All-Star Game comes to town in July 2009. "I know a lot of the outcry is, 'Well, do something with it," DeWitt said. "I'm in agreement on that."
Comptroller Darlene Green has suggested paving over the area for some type of "a celebratory venue" that would keep an "unsightly hole in the middle of our downtown" from view during the All-Star Game.
More bad news for teams and governments who have funded stadium construction in the auction-rate bond market.
Neil deMause summarizes Bloomberg News most recent report on the “crisis”.
Among the projects facing skyrocketing bond payments: The state of Louisiana saw its monthly payments for refurbishing the New Orleans Saints' Superdome jump from $500,000 in January to $1.8 in February; the new New York Jets and Giants stadium saw part of its $650 million in auction-rate debt hit a staggering 22% interest rate last week; the city of Cleveland paid 12% on debt for the Cleveland Browns' stadium in February, up from 4% the month before; and the state of Indiana saw rates on its $611 million for a new Indianapolis Colts stadium leap to 15% in mid-February, before dropping back to 5% last week.
SBJ reports on the same developments and speculates if the increasing stadium financing costs will worsen already strained relations between the owners and the PA.
OTHER NEWS ACROSS THE BUSINESS OF SPORTS NETWORK
Pete Toms is a staff member of the Business of Sports Network. He can be contacted at \n