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Oct. 23 – City Staff report on a new ballpark delayed while Hardball Capital responses to questions

Category: News Features/Series

By Lou Phelps, Savannah Business Journal

October 23, 2014 – City Manager Stephanie Cutter had been set to release her staff’s report midweek on their review of the national consultant’s report – presented to the City Aldermen last month – on the possibility of building a new minor league baseball stadium in Savannah’s Historic District.

Johnson Consulting of Chicago told the Mayor and Aldermen last month during a workshop that a multi-use stadium at the Savannah River Landing would be a positive for the city, and would generate economic development in that area which has been stymied for years. They contend that building at that site would also increase the value of the remaining 60 acre plus tract.  Of course, there are serious questions about whether the land is even available for sale.

The consultants said a new stadium anywhere in the downtown area would double attendance of the Sand Gnats, as well, supporting the position held for years by Hardball Capital of Atlanta, owners of the Sand Gnats, that they would be more financially successful here with a new park. 

The Sand Gnats have the second lowest attendance levels of the other minor league teams in the South Atlantic League.  And the only team with lower numbers, the West Virginia Power located in Charleston, WV is reported to be doing well financially and is not in negotiations for a new stadium.

According to Minor League insiders, the Sand Gnats are not in financial trouble, either. But franchise owners want new stadiums which offer a better fan experience, and dream of the increased revenues, all of which increases the value of the asset they own.

There are a number of examples of minor league teams with new stadiums over the past five years, reviewed with the City Council, and other deals now in the works. For example, the Hagerstown Suns may soon be leaving Maryland, lured by a new stadium and higher revenue streams in Fredericksburg, VA.

And, Columbia, SC. is now building Hardball Capital a new stadium in that city.  Hardball has got to own a team to put there, and there are few for sale.

The goal of a new park in Savannah would be primarily to convince the owners of the Savannah Sand Gnats to stay - for the team’s owners not to move the team to Columbia.  

A memo and recommendations from the City Manager and staff was due out today, a week in advance of next week’s City Council workshop, for a presentation.

But, according to Hardball Capital owner Jason Freier, the City staff has asked him to respond to a series of questions, which will take several weeks.  Joe Shearouse, Director of Leisure Services for the City, the department that oversees Grayson Stadium, has been tasked by Cutter to work with Hardball Capital on the project.

“We have been asked to chase down a couple of things,” said Freier in an interview today.  “Until we’ve chased these things down, we’re not expecting a staff report to be issued.”  

“The City has expressed a willingness to down a few roads with us,” of possible ways to fund the project and other issues, explained Freier.  “We have to do this in an expeditious manner because we don’t have a lot of time,” he added, but we was very encouraged by the City staff’s interest in understanding multiple options.

“Of course, we ca n put a great plan on the table, consistent with the consultant’s report, but that doesn’t mean we have the votes for it on the City Counsel,” he acknowledged.  

A number of City Aldermen have expressed public and private concern about funding options presented to date, and “the timing,” of taking on a major ballpark project in the downtown area at this time. 

Johnson Consulting outlined very favorable business return on investment for the City in their September report, based on the Savannah’s demographics, growth patterns and tourism population which will be tapped by a downtown stadium versus Grayson Stadium on Victory Drive.  However, a number of Aldermen have questioned the experiences of other cities which have built minor league parks. 

As the City looks at new strategies, the current negotiations going on in Fredericksburg, VA are interesting. In August, the partners seeking to build a baseball stadium complex in Celebrate Virginia South in Fredericksburg made a new offer to address the $18 million that city is contemplating for a new ballpark.  A revenue sharing proposal by the partners, with the City, is being considered “in exchange for the city covering the $18 million up front,” according to a local news report.

“Specifically, the partnership of Diamond Nation and the Hagerstown Suns, are offering to return 3 percent of gross revenues to the city for the first 10 years of stadium operations. After that, the partners would forever give the city 1.5 percent of gross revenues,” according to The Free Lance-Star Publishing Co. of Fredericksburg, VA.

“The team’s initial projections for a roughly 5,000-seat stadium and a complex for amateur baseball and softball with six artificial turf field was $35 million. However, contractor bids have put the cost closer to $53 million. That is on top of $8 million the city has agreed to provide to pay for an1,800-space parking lot to serve the stadium. The owners of the Hagerstown Suns and Diamond Nation, a sports complex in New Jersey, are partnering to try to build the stadium. Their goal is to have it built in time for the launch of the 2016 minor league season,” the newspaper reports in an article published Aug. 21, 2014.

The Savannah consultant’s report also said a minor league team and park in the downtown area would increase tourism and generate millions in additional spending a year, creating increased employment and sales taxes. 

Renovating Grayson Stadium appears to be out, as an option for the City.   Johnson Consulting said that no matter what transportation strategy was devised, the Gnats would not be able to draw tourists out of the downtown area to Grayson Stadium in Daffin Park. For that reason, there was not logic in spending millions to modernize the ballpark experience there.

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