Winston-Salem Ballpark: Build it. But will they come?

Updated July 24, 2009

On June 28, local leaders approved a multi-million dollar investment of tax dollars into a new stadium for the Winston-Salem Dash, the city’s Class-A professional baseball team.

According to Dash team owner Billy Prim, construction on the downtown baseball stadium would resume almost immediately after the vote, in which the city council approved additional financial help for the ballpark by unanimous vote.

People who attended the public hearing at City Hall spoke mostly in favor of the city's additional involvement, saying that an unfinished stadium would harm the city's economy and make it difficult to attract new businesses.

Many at the city council hearing on the 28th said that they think of the new ballpark as a source of civic pride.

Others who spoke said they were in favor of the deal because they thought the city had no other options and asked simply for more transparency in the city's financial dealings with the stadium.

"It's kind of like we've got to do it," said Jane Dougherty, a city resident who said she was in favor of finishing the ballpark. "We're in a sinking ship, so we've got to bail it out."

The 5,500 seat stadium’s estimated cost is $40.7 million. Prim’s development group initially estimated the project’s costs at $22.6 million in 2007.

The deal approved by the council in June included more oversight than the original deal announced by Mayor Allen Joines and the project developer.

According to the initial deal, the city would get the title to the main parking lot ahead of one of the banks lending money to Prim's development company should Prim default on the loan. Regions Bank – an Alabama-based lender – would have had to agree to that condition for the deal to be complete.

After the council’s vote, Prim stated that he hoped to close on the loan by mid-July. The basic terms of the original deal provided that the city would take out a loan for $12.7 million to buy land for the stadium and help finish construction. Brookstown Development Partners would repay the loan over 25 years. The city would also advance the company $2 million from a federal grant to pay for parking lots and roadwork (that grant has been approved, but must be amended to include the roads for the stadium). And the city will finance $980,361 for Prim's company to buy city-owned land around the stadium. The company would pay for the land over 5 years.

Ownership of the stadium would transfer to the city in 25 years.

Is the deal really done?
The ink wasn’t even dry on the minutes of the meeting before the city council was back at the drawing board, making changes to the financing agreement for the ballpark– but after another unanimous city council vote on the restructured deal on July 20, all systems appeared to be on go.

Those involved in the negotiations said that Regions Bank was balking at the stipulation that the city would take title to the main parking lot. But in a flurry of activity in July, all parties agreed to a new deal under which the city would own the stadium immediately at closing, rather than waiting 25 years. The city will lease the stadium to the developer for about $685,000 annually for the first three years and about $977,000 annually for the remaining 22 years.

Prim will be responsible for maintenance, operating costs and taxes on the stadium, which will be home to his Winston-Salem Dash baseball team.

But will they come?
In order for his company to repay the city's loan, Prim has said that the team needs to sell 350,000 tickets a season – a number that some believe to be impossible.

Lenox Rawlings, a long-time sports columnist for the Winston-Salem Journal, is a leading voice of skepticism about the public-private venture to finish the baseball stadium. Rawlings noted that last season, The Dash drew 169,963 fans to 66 home games, for an average of 2,575 per game.

“It might sound like a short ride from 2,575 to 4,286 – at least a shorter ride than from the new ballpark to Winston-Salem's actual downtown – but experiences elsewhere suggest a tougher road, especially after the stadium's novelty wears off,’’ wrote Rawlings.

Among the 82 teams in all Class A minor leagues last season, only 16 averaged at least 4,286 fans. In the Carolina League, an advanced A league, only two Winston-Salem rivals reached that figure. The Wilmington, Del., Blue Rocks, who scheduled a Joe Biden bobble-head night this summer, drew about 312,000 fans and averaged 4,527. Frederick, Md., drew 295,656 fans and averaged 4,480.

Four Class A teams in short-season leagues (in Lowell, Mass.; Brooklyn, N.Y.; Staten Island, N.Y.; and Spokane, Wash.) averaged 4,973 to 7,367.

Dash promoters imply that Winston-Salem should come close to matching Greensboro, which belongs to a lower Class A league, the South Atlantic. In minor-league terms, though, Greensboro is a shining success story, with average sales of 6,297 per game in 2008. Only two teams from all the Class A leagues drew more customers than Greensboro's 440,000: Dayton (586,000) and Kane County, Ill. (472,000). Brooklyn and Lakewood, N.J., also had higher averages.

Greensboro surpassed Charlotte, a Class AAA team from the International League that averaged 4,526 on a total gate of about 312,000. The Durham Bulls, who play in the same league, drew about 504,000 and averaged 6,995. Last season, Winston-Salem was on par with Asheville, a member of Greensboro's league that attracted 176,000 customers and averaged 2,625.

The controversies
Adequate parking for the stadium and a prohibitive tree ordinance are the least of the controversies surrounding the new ballpark. Details of the deals have not been made public until just prior to their city council votes, and despite the increased reporting in the new agreement, transparency remains a problem.

Many Winston-Salem taxpayers have been troubled by local media reports on the stadium deal, such as a $390,000 fee to a construction management firm owned by Prim, the team owner and project developer. City officials have claimed, however, that no taxpayer dollars will be included in the fee paid to Prim’s construction management firm.

Additional concerns surfaced during the project’s hearing before the city’s Appearance Commission. On June 13, stadium developers took their revised project concept before Winston-Salem’s Community Appearance Commission. Commission members expressed approval of the new design, but showed some concerns that included: a large proposed gravel parking lot adjacent to the stadium, and a six-story tall replica of a water bottle to be installed on one stadium wall. The “water bottle” would promote a bottled-water company owned by team owner Prim, and it didn’t win the support of all commission members – or from Pat Eisenbach, a Winston-Salem resident who attended the meeting.

"I was surprised that there would be this huge water bottle on a stadium that was partly funded by tax dollars … It's just tacky," she said after the meeting.

Whether the ballpark has a giant bottle towering over Business 40 may end up being debated. The bottle isn't allowed under the city’s current sign ordinance. But neither are other, more traditional features of the stadium, such as proposed banners and lettering with the name of the ballpark -- "Sponsor Field," for example, which is shown on the drawings.

Project architects told the commission that they would push to change the signage rules. The architects said Prim and the developers do not consider the giant bottle as signage, but more of “an integral part of the architecture.’’

Some history
Prim said the breakup of the ownership group for The Dash had put the completion of construction of a new baseball stadium and the teams’ continued presence in the Twin Cities in jeopardy. Construction on the new stadium has been stalled for months as the development group sorts out its internal issues.

Prim, president and owner of Brookstown Development LLC, stated that his split with his business partners and the current crisis in the financial community made financing the completion of a new baseball stadium an insurmountable challenge for his company. Prim initially asked the City of Winston-Salem to contribute an additional $15.7 million in loans, grants, and financing to allow for the completion of The Dash’s new stadium.

The Dash – formerly known as the Warthogs – played what was to have been its final season last year at Ernie Shore Field, which was owned by the city of Winston-Salem. The city sold it to Wake Forest University to help pay for part of the new minor-league stadium.

Prior to the current financing deal, the city had already contributed $12 million to the cost of the downtown ballpark, which developers have said will be part of a larger $189 million development at First and Broad streets. Design sketches call for that development to include upscale shops, restaurants and office space. The city paid the team $5 million upfront, using money from the sale of Ernie Shore, and paid the rest of the city's contribution in $1 million-a-month installments. The city made its final payment to The Dash in May 2008, city records show.

Under the agreement with the city, the team must finish building the stadium by March 2010. The team had said it would be finished by April, and sold season-ticket packages with that date in mind.

In a letter circulated to stadium supporters, Prim wrote that public financing for completion of the new stadium would bring great economic benefits to Winston-Salem.

“This project is critical to the future of our city,’’ he wrote. “It will immediately create a $60 million tax base that we believe will grow to more than $180 million over the next few years. If we fail to finish this project our city will have a hard time recovering from the negative images it would bring.’’

Prim wrote that completing the stadium “will not cost the taxpayers any money” and “will not require additional money from the city nor affect its AAA bond rating.”

The developer suggested in his letter that the city is only helping his firm “secure financing with the banks.”

Prim’s initial proposal suggested that the city take out a $12.7 million loan with BB&T and then hand the money over to Prim’s group. That money, according to Prim, would be used: (1) to pay subcontractors for work already completed at the site, (2) to buy the rest of the land needed for the stadium and parking lots, and (3) to pay for the completion of the park’s construction. Prim’s group would repay the loan – principle and interest – back to the city over 25 years.

Home run or shut-out?
Some believe that the real cost of the new ballpark could exceed $50 million when all is said and done., and that The Dash won’t have the draw that city leaders anticipate. Billy Prim disagrees, of course.

But many Winston-Salem taxpayers wonder why the city continues to gamble with their dollars. If the project was a sure-fire moneymaker, they argue, wouldn’t Prim or another investor jump at the chance to finance it privately? Didn’t Winston-Salem leaders learn anything from their experience with the taxpayer-financed convention center? Moreover, given that Winston-Salem is struggling for funding for the most critical services for its citizens, like education and crime control, should this expenditure of taxpayer dollars even be on the radar screen?

Once again, local elected leaders have lost sight of priorities as well as their proper role in community development. They’ve forgotten that it’s not their money.

Let’s hope Winston-Salem taxpayers won’t strike out again on this deal.