If you crunch the numbers, it's questionable whether the Winston-Salem Dash will ever make money — even with the city paying to finish construction of a new downtown ballpark.
Either Billy Prim is one of the smartest businessmen in minor-league baseball or a man who has dug an incredibly deep hole in building a new downtown ballpark for the Winston-Salem Dash (High Class A; Carolina League) — a hole that may be impossible to exit.
The Winston-Salem Journal looked closely at the numbers surrounding the new ballpark, slated to be finished this offseason for a 2010 debut. The city had originally put $12 million toward the new ballpark and is putting a second round of $15.7 million toward the project, for a total of $27.7 million of the $40.7 million facility. Financing on the project has always been a moving target, with one bank withdrawing its loan and the city coming in with hew funds. The Journal has done a very good job of looking at the numbers, though in the end the article shows why municipalities build ballparks: the city is borrowing a lot of money at a very attractive rate — much lower than Prim could have received on the open market.
What the article doesn't address, however, is any question of how Prim plans to make money with the Dash, even with the new revenue streams afforded by the new ballpark. First off, there's the issue of a $5.5 million loan issued by the city to Prim at the beginning of ballpark construction. To make the yearly payment on that loan alone, the Dash must average 4,900 fans a game — or 89 percent of capacity — and generate revenue via a $1 ticket surcharge.
Then there's the repayment of the city loan. According to the terms of the loan, the Dash must pay $685,000 annually for the first three years of repayment, which covered only interest; on the fourth year the amount rises to $980,000 annually. Besides this, Prim will need to pay down another $20 million in loans against money already spent on ballpark construction.
The article also raises the issue of Prim needing to pay property tax on the ballpark — but if the city owns the ballpark, it's extremely unclear whether Prim and crew will be on the hook for another $390,000 annually.
The game plan here is for an additional $160 million in development orchestrated by Prim to help offset these losses. But in this economy, you're got to wonder about any large-scale mixed-use development in a city the size of Winston-Salem. And we're guessing there aren't many owners who would be happy about a ballpark financing plan with so much devoted annually to debt service.
RELATED STORIES: Winston-Salem to buy unfinished Dash ballpark; Ballpark oversight committee forming in Winston-Salem; Winston-Salem will fund ballpark completion; Prim can't raise $$$ to finish Dash ballpark; wants city bailout; How can Dash pick up the pieces for 2010?; Dash confirms no games at new ballpark this season; New Winston-Salem ballpark unlikely to open this season; Dash to play at Ernie Shore Field through June 17 — at least; Dash announces new mascot; still working on new ballpark; Prim seeks $6 million in outside financing to complete ballpark; Will new Winston-Salem ballpark open on time?; Prim sought additional city financing for new W-S ballpark; More details released on Winston-Salem ballpark upgrades; Prim: New Winston-Salem ballpark may not open in April; New for 2009: The Winston-Salem Dash; New Winston-Salem ballpark opening may be delayed
Subscribers to the weekly Ballpark Digest newsletter see articles before they're posted to the site. You can sign up for a free subscription at the Newsletter Signup Page.
Join Ballpark Digest on Facebook and on Twitter!