A new ballpark in Richmond’s Shockoe Bottom area can’t happen unless the city backs the bonds — a move that could suck up 11 percent of the city’s borrowing capacity — as a trio of consultants endorse the proposal, albeit with a laundry list of caveats. Still hanging: a sale of the Connecticut Defenders.If Richmond wants a new ballpark in the city’s Shockoe Bottom area, the city must financially back the proposal to assuage bondholders, according a report partially released by Mayor Dwight Jones yesterday.
The consultants call for the city to finance the ballpark, as opposed to a third party issuing the bonds. Without the lower cost of borrowing available to the city (projected by consultants as 4.05 percent for 20 years), the $56-million ballpark for the relocated Connecticut Defenders is not viable.
And it does pose a risk to the city. Issuing those bonds will take up almost 11 percent of the city’s bonding capacity. If new revenues generated by a Shockoe Bottom development do not reach projected levels, the city will need to make up the difference. There is some give from the consultants: the development need only reach 67 percent of projected levels to cover debt service on the ballpark financing.
You can read a summary of the report by clicking on the link at the bottom of this page.
The report did pull some punches and didn’t go into depth on some touchy political issues, such as the continued financial participation of neighboring counties.
The summary, alas, doesn’t really clear up the ballpark situation. And it doesn’t really clear up the delayed sale of the Connecticut Defenders (Class AA; Eastern League) to a group seeking to move the team to Richmond. City officials say they’ve been promised an Eastern League team will be playing at The Diamond, the former home of the Richmond Braves (Class AAA; International League), in 2010. The $15.4-million sale of the Defenders, which had been expected to close in April, is now on hold, and the agreement to close the deal ends at the conclusion of May. The issue will be whether the Richmond group pulls the trigger on a purchase of the team without the assurance of a new, basically free Shockoe Bottom ballpark. It’s been interesting that none of the financial projections from the city calls for anything upfront from the team; this lack of financial commitment from the team may end up coming back to haunt the potential owners — and Minor League Baseball.
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