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Diamond Nation: Front us more money, and we’ll share ballpark revenues

Hagerstown SunsOffers of revenue-sharing are rarely taken up by municipalities, so it will be interesting to see if the offer by Diamond Nation to share revenues on a Fredericksburg, Va., baseball complex in exchange for upfront financing actually happens.

Diamond Nation, a New Jersey firm seeking to develop a baseball complex in Fredericksburg that includes a new Hagerstown Suns (Low Class A; Sally League) ballpark, has an $18-million funding gap in its $61-million development plan. Efforts to identify alternative sources of funding have apparently fallen short, so Diamond Nation officials are pitching the city on a new plan: Fredericksburg would front the $18 million and waive all property taxes, and in return Diamond Nation would pay 3 percent of gross revenues for the first 10 years the complex is open, and 1.5 percent after that, until the $18 million is paid back. This would come on top of the $22 million in tax breaks and direct spending already promised by city officials. From

The owners of Minor League Baseball’s Hagerstown Suns and Diamond Nation, a New Jersey-based training and tournament facility, are offering to return 3 percent of the gross revenues from the entire complex for the first decade of operations and 1.5 percent of the gross revenues thereafter.

In exchange, they are asking for $18 million more in financial assistance from the city and to be exempt from real estate taxes for the life of the project, according to a letter emailed to the city Thursday morning by Jack Cust, owner of Diamond Nation.

Cust justified the request for tax-exempt status by stating that no other minor league team associated with Major League Baseball pays taxes on its stadium. Most stadiums are government owned.

Of course, some teams do indeed pay property taxes, depending on their lease; just this week the New Britain Rock Cats (Class AA; Eastern League) paid back property taxes on New Britain Stadium. Other developers have offered to exchange revenues for financing, but typically the offers aren’t accepted; municipalities usually need to see some sort of guaranteed funding in order borrow money at a reasonable rate. If revenues fall short and there’s not enough to cover bond payments, then the municipality is on the hook to cover the shortfall — not the developer. Now, there are ways around this — a special tax district could be set up to cover bond payments — but the proposal by Diamond Nation asks Fredericksburg to assume a lot of the risk and no guaranteed reward.

The proposed ballpark complex would also include several youth-baseball fields; the Diamond Nation business plan calls for plenty of youth tournaments in addition to minor-league baseball. The team has a lease at Hagerstown’s Municipal Stadium through 2016.

RELATED STORIES: Price tag for new Fredericksburg baseball complex: $61M; New Fredericksburg ballpark over budget; owners exploring options; New Fredericksburg ballpark opening delayed to 2016; Fredericksburg ballpark groundbreaking set for March; Quinn: Let’s bring short-season ball to Hagerstown; Fredericksburg ballpark deal moves forward — slightly; Local investor boosts Fredericksburg ballpark plan; Fredericksburg: We have deal to bring in Hagerstown Suns; Hagerstown: Yes, we really do want a downtown ballpark; Private financing pitched for new Suns ballpark; Fredericksburg, Suns to meet Tuesday to discuss new ballpark deal; Fredericksburg: We have five weeks to negotiate Suns lease; Fredericksburg: We need better deal from Suns; Fredericksburg City Council to debate new Sally League ballpark; Fredericksburg officials, Quinn discuss new ballpark; Hagerstown, Fredericksburg preparing dueling ballpark plans; Fredericksburg ballpark could end up turning profit for city: study; Fredericksburg ballpark funding plan emerging; Fredericksburg touted as ideal for professional baseball; Hagerstown owner: We’d meet with Fredericksburg about new ballpark; Fredericksburg to study financial impact of new ballpark; Fredericksburg, Opening Day Partners talking new ballpark; Suns: We’ll put up cash for new ballpark if donation falls through; Will new members of Hagerstown City Council kill new-balpark plan?; See for yourself: fans get peek at problems with Municipal StadiumAnonymous donor pledges $15M for new Hagerstown ballpark; Hagerstown: Construction of new ballpark could begin next springWinchester: We’re not optimistic about landing SunsHagerstown takes first step toward ballpark fundingHagerstown mayor: We’re close to long-term lease with Suns; Hagerstown: Let’s begin designing new downtown ballpark


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